an evaluation of the mvula trust strategic plan with

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AN EVALUATION OF THE MVULA TRUST STRATEGIC PLAN WITH SPECIAL REFERENCE TO ITS ABILITY TO SUPPORT THE WATER SERVICES DELIVERY ROLE OF DEVELOPMENTAL LOCAL GOVERNMENT IN NORTHERN KWAZULU-NATAL By Mbongiseni William Buthelezi (202523396) A dissertation submitted in partial fulfillment of the degree of MASTER OF BUSINESS ADMINISTRATION In the Graduate School of Business, Faculty of Management Studies At the University of KwaZulu-Natal, Durban Supervisor: Dr Nobubele Potwana December 2006

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Page 1: AN EVALUATION OF THE MVULA TRUST STRATEGIC PLAN WITH

AN EVALUATION OF THE MVULA TRUST STRATEGIC PLAN WITH SPECIAL

REFERENCE TO ITS ABILITY TO SUPPORT THE WATER SERVICES

DELIVERY ROLE OF DEVELOPMENTAL LOCAL GOVERNMENT

IN NORTHERN KWAZULU-NATAL

By

Mbongiseni William Buthelezi

(202523396)

A dissertation submitted in partial fulfillment of the degree of

MASTER OF BUSINESS ADMINISTRATION

In the Graduate School of Business, Faculty of Management Studies

At the

University of KwaZulu-Natal, Durban

Supervisor: Dr Nobubele Potwana

December 2006

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DECLARATION

I, Mbongiseni William Buthelezi, hereby declare that An Evaluation Of The Mvula Trust

Strategic Plan With Special Reference To Its Ability To Support The Water Services Delivery

Role of Developmental Local Government In Northern KwaZulu-NataV is my own work, and

that all the sources I have used or quoted have been indicated and acknowledged.

I further declare that this research has not been previously accepted for any degree and is not

being submitted in candidature for any degree.

Signed

Date : 15 December 2006

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ACKNOWLEDGEMENTS

I wish to express my indebtedness to the following people and organizations:

1. My supervisor, Dr Nobubele Potwana, for her guidance, supervision and support throughout the study.

2. My former employer, The Mvula Trust, for granting me permission to centre my study on the evaluation of the organization's strategic plan.

3. Municipal officials from Umkhanyakxide, Uthungulu and Zululand without whose support my research would not have been possible.

4. My colleagues and friends who always believed I have all what it takes accomplish a project of this magnitude and quality.

5. Ms Leena Samuel, US Peace Corps Volunteer, for her sterling work in editing my writing.

6. My loving parents, Mchitheni and Martha, for being supportive and appreciative of my accomplishments in life, no matter how small they are. This gave me strength and impetus to press on with my academic pursuit and constant quest for knowledge.

7. Finally, my wife, Nokuthula and my three kids, Mfezeko, Kgabiso and Inga for their unwavering moral support, understanding and encouragement over the past two and half years. I am truly blessed to have such a family.

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ABSTRACT

At the dawn of democracy in South Africa, there were still an estimated 12 million people without adequate water supply services and nearly 21 million people without adequate sanitation services (Strategic Framework for Water Services, 2003). Since then South Africa has made great strides in reducing this gross inequality in water services provision. In response to this evident challenge, the South African Government has developed various key pieces of Local Government legislation which aim to address water services. To speed up water services provision, a number of service delivery strategies and agents were explored. The Mvula Trust is one such agent that was established in 1993 with the sole mandate of supporting the Department of Water Affairs and Forestry (DWAF) to develop affordable and sustainable water services in both rural and peri-urban parts of South Africa. After the establishment of Local Government in year 2000, the Mvula Trust had to enter into a new contract with this tier of government for the continuation of their primary constitutional mandate for water services delivery. In order to respond to the new operational requirement put on it and to align itself with the Local Government mandate, Mvula Trust embarked on the process of crafting its new strategy that would strengthen its ability to support the water services delivery role of Local Government. Hence the main objective of this research study was to conduct a rigorous evaluation of Mvula's Strategic Business Plan (SBP) developed in 2003 by subjecting it to contemporary strategic planning processes. The study also looks at the extent to which the crafted five-year strategy has supported three northern KwaZulu-Natal District Municipalities of Uthungulu, Umkhanyakude and Zululand to deliver water services to their respective communities.

A qualitative approach was employed to gather data about the situation under investigation. The first step was to gather secondary data from documents developed by both Mvula and the Department of Water Affairs and Forestry. The second step entailed collecting data from officials of Uthungulu, Umkhanyakude and Zululand District Municipalities using the questionnaire. The total number of questionnaires administered for the purpose of this study was thirty (30). For data analysis, all twenty-five (25) returned questionnaires were captured and coded using the software called Microsoft Access and subsequently imported into an analytical tool called stata. The main results from literature review and analyses indicate that Mvula's crafted strategy is not providing the organization with the competitive edge since it was not developed in line with contemporary strategic planning processes. Secondly, the existing strategy is not delivering on services requirements of municipalities. The services articulated by municipalities are mainly Institutional and Social Development (ISD) and quality sanitation development, in which roles Mvula can serve as a Project Agent (PA) instead of an Implementing Agent (IA). Finally, Mvula has not succeeded in supporting the water services delivery role of Northern KwaZulu-Natal District Municipalities. These findings imply that Mvula should embark on a rigorous strategic review. It should develop both a vision statement and a new mission statement which will respectively serve as a roadmap of the organization's future as well as a description of the organization's present capabilities, customer focus, activities and business make-up. Mvula should broadly consult with existing and prospective clients to better understand their support services needs. It is recommended that Mvula define its specific niche within the water services sector. Thus, the resulting strategy should adequately support local government towards meeting the 2014 deadline set for the eradication of water services backlog in their jurisdictional areas.

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TABLE OF CONTENTS

CONTENTS PAGE

DECLARATION i

ACKNOWLEDGEMENTS ii

ABSTRACT iii

LIST OF FIGURES vii

CHAPTER ONE: INTRODUCTION TO THE STUDY 1

1.1 Preamble 1

1.2 Background 2

1.3 Problem statement 6

1.4 Purpose of the study 7

1.5 Research questions 8

1.6 Hypotheses 8

1.7 Limitations of the study 9

1.8 Structure of the study 9

1.9 Concluding summary 10

CHAPTER TWO: CASE STUDY 11

2.1 Introduction 11

2.2 Historical overview of Mvula 12

2.3 Co-operation agreement with DWAF 13

2.4 Change in the funding environment 14

2.5 Mvula's influence on water services'policy development 15

2.6 Mvula's approach to project management 17

2.7 The organization's changing work context and portfolio 19

2.8 The development of Mvula's five-year strategic plan 21

2.9 The proposed survival strategy 22

2.10 Concluding summary 23

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CHAPTER THREE: LITERATURE REVIEW 24

3.1 Introduction 24

3.2 Defining strategic management 24

3.3 Stages of strategic management 26

3.3.1 Developing a mission statement and strategic vision 31

3.3.2 Situation analysis 32

3.3.3 Setting strategic objectives and crafting a strategy 36

3.4.4 Strategy implementation and execution 38

3.3.5 Strategy evaluation 41

3.4 Concluding summary 56

CHAPTER FOUR: RESEARCH METHODOLOGY 58

4.1 Introduction 58

4.2 Research design 58

4.2.1 Secondary data analysis 59

4.2.2 Experience survey 60

4.3 Sampling procedure 62

4.4 Data collection methods 63

4.5 Data analysis 65

4.6 Concluding summary 66

CHAPTER FIVE: PRESENTATION OF FINDINGS 67

5.1 Introduction 67

5.2 Empirical findings 68

5.2.1 Capacity in which respondents knew Mvula 68

5.2.2 Services provided by Mvula to district municipalities 69

5.2.3 Knowledge of Mvula's mission and vision 69

5.2.4 Knowledge of Mvula Strategic Plan: 2003-2008 document 70

5.2.5 Involvement in the Strategic Plan development process 70

5.2.6 Consultation for input during and after the strategic planning process 70

5.2.7 Comment on Mvula's preferred service provider status 70

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5.2.8 Any water projects implemented by Mvula within municipalities 71

5.2.9 Any sanitation projects implemented by Mvula within municipalities 71

5.2.10 Increase or decrease in the number of projects allocated to Mvula 72

5.2.11 Factors that contributed to either increase or decrease in Mvula projects 72

5.2.12 Recommendation that the current Mvula strategy be revised or strengthened 73

5.2.13 Aspects of the current Mvula strategy to be revised or strengthened 74

5.2.14 Mvula's success rate in supporting municipal water services delivery role 74

5.2.15 Water services delivery support needed by municipalities 75

5.2.16 General comments about Mvula's role in supporting water services 75

5.3 Concluding summary 76

CHAPTER SIX: CONCLUSIONS AND RECOMMENDATIONS 77

6.1 Introduction 77

6.2 Addressing demographic profile 78

6.3 Addressing the first research question 79

6.4 Addressing the second research question 81

6.5 Addressing the third research question 82

6.6 Recommendations 83

6.6.1 Review strategy in line with contemporary strategic planning process 83

6.6.2 Develop vision statement and new mission statement 84

6.6.3 Broad consultation with existing and prospective clients 85

6.6.4 Define specific niche for the organization with the water services sector 86

6.6.5 Internal and external strategy evaluation 86

6.6.6 Develop viable communications and marketing strategies 87

6.6.7 Speed up pace of project implementation 87

6.7 Concluding summary 87

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LIST OF FIGURES

FIGURE PAGE

Figure 1 Sequential approach to strategic management 26

Figure 2 The five tasks of strategic management 30

Figure 3 Strategic management process 33

Figure 4 The value chain 34

Figure 5 E-V-R congruence 42

Figure 6 Establishing the rationale 45

Figure 7 Testing suitability 48

Figure 8 Gap analysis 61

Figure 9 Performance gap analysis 62

Figure 10 Number of respondents knowing Mvula in different capacities 68

Figure 11 Services provided by Mvula to district municipalities 69

Figure 12 Number of respondents knowing Mvula's mission and vision 69

Figure 13 Comment on preferred service provider 70

Figure 14 Implementation of water projects according to respondents 71

Figure 15 Implementation of sanitation projects according to respondents 71

Figure 16 Size of respondents versus status of projects allocated to Mvula 72

Figure 17 Factors shown according to the number of respondents 73

Figure 18 Number of those who recommended revision of strategy 73

Figure 19 Number of respondents who rated Mvula's performance 74

Figure 20 Water services needs as per the number of respondents 75

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CHAPTER ONE

INTRODUCTION

1.1 Preamble

The world has enough resources for all to have access to the basic services, such as safe

water and sanitation, which are necessary for healthy living. Yet more than one billion

people do not have access to potable water supply services and nearly 2.5 billion people

are without adequate access to basic sanitation services. At the dawn of democracy in

South Africa there were an estimated 12 million people without adequate water supply

services and nearly 21 million people without adequate sanitation services (Strategic

Framework for Water Services, 2003). Since then South Africa has indeed made great

strides in reducing this gross inequality in water services provision. It is estimated that

more than 10 million people have, over the past ten years, been provided with basic

water services. While this is an impressive achievement, inequality in access to basic

services is still a stark reality. Great challenges still remain if the Government has to

meet its 2014 deadline to eradicate the current water services backlog in the country, as

promised to the citizens.

In response to this evident challenge, the South African Government has developed

various key pieces of Local Government legislation, which among other things, aim to

address water services. These are the Municipal Structures Act 117 of 1998; the

Municipal Structures Amendment Act 33 of 2000 and the Municipal Systems Act 32 of

2000. The Municipal Structures Amendment Act regulates all District Municipalities

referred to as Category C, which are allocated the water services authority function. If

authorized by the Minister of Provincial and Local Government in consultation with the

Minister of Water Affairs and Forestry, Local Municipalities, referred to as Category B,

municipalities can also perform the Water Services Authority (WSA) function. The other

important piece of legislation is the National Water Act 36 of 1998 which legislates the

way that the water resource, surface and ground water is protected, used, developed,

conserved, managed and controlled (Water and Sanitation Business, 2001).

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The Water Services Act 108 of 1997, on the other hand, regulates the municipal function

of providing water supply and sanitation services commonly called water services, while

establishing institutional arrangements for water services provision. According to this

Act, four different water services institutions exist, and these are the water services

authority, water services provider, water board and water services committee. In order to

speed up water services provision, a number of delivery strategies, mechanisms and

agents were explored. The Mvula Trust is one such agent that was established in 1993

with the sole mandate of supporting the Department of Water Affairs and Forestry

(DWAF) to develop affordable and sustainable water services in both rural and peri-

urban parts of South Africa. The role of Mvula Trust as a Non-Governmental

Organization (NGO) has been that of a Water Services Provider (WSP) under contract to

DWAF.

The advantage of engaging an NGO was that government would have access to the rich

diversity of experience and thinking of people who are neither in government nor

business. Secondly, there is a belief that NGOs work from an ethical or moral base and

that they are generally trusted by disadvantaged communities also from a social change

perspective (KwaZulu-Natal CSO/NGO Procurement, 2003). After the establishment of

Local Government in year 2000, the Mvula Trust had to enter into a new contract with

this tier of government for the continuation of their primary constitutional mandate for

water services delivery. In order to respond to the new operational requirement put on it

and to align itself with the Local Government mandate, Mvula Trust embarked on the

process of crafting its strategy that would strengthen its ability to support the water

services delivery role under the auspices of Local Government.

1.2 Background of the study

The Mvula Trust (hereinafter referred to as Mvula) is a Non-Governmental Organization

(NGO) founded in 1993 by the Development Bank of Southern Africa (DBSA), Kagiso

Trust/European Union (KT/EU) and the Independent Development Trust (IDT). Mvula

was established as an interim drought relief mechanism that was expected to run for only

three years.

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Its primary mandate was to develop water and sanitation in both rural and peri-urban

areas. The organization has, however, survived all the social and political changes that

occurred in the country since 1994. In order to ensure its continued existence as a

government-support mechanism, Mvula had to deal with major challenges of adapting to

the new operational environment and to redefine its client and services. The latter arises

from the fact that almost all WSAs believe that they have enough water services delivery

capacity to perform, not only within but beyond, Mvula's role. This challenge meant that

Mvula had to carve its new niche as a Water Services Provider now supporting Local

Government instead of DWAF. Local Government has its own expectations, imperatives

and a different mode of operation. DWAF has now been assigned a distinct role as a

Policy Regulator within the water sector. It is these demands and change of roles that led

Mvula to embark on an intensive strategic planning process that culminated in the

strategic planning document.

It is only recently that Mvula has completed and adopted its first five year-Strategic

Business Plan (2003 - 2008) after approximately ten years of existence. It is a strategic

review process that was initiated in late 2002, with funding support from the

Strengthening Capacities for the Transforming Relationships and Exercising Right?

(SCAPE) programme implemented by Co-operative Assistance & Relief Everywhere -

South Africa (CARE-SA). The purpose of this initiative was to critically review the

challenges facing the South African water sector and their implications for Mvula as a

leading NGO; build consensus around the challenges facing Mvula; chart a new

direction for the organization over year period ending 2008 and to reposition the

organization to function effectively and efficiently within the current and future

environment. The start of the SCAPE process was marked by the National Policy

Workshop in December 2002, where a comprehensive review of the operating

environment and the organization's own performance were undertaken, through a

process of workshops with regional staff, internal leadership, external financial

specialists and members of the Board of Trustees. Key challenges and opportunities

were identified; most notable was the growing consensus within Mvula that change in its

own practice and approach was essential.

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This process culminated in a new mission for the institution being adopted which is "To

improve the health and livelihoods of poor and disadvantaged South Africans in rural

and peri-urban communities through facilitating delivery of integrated and sustainable

water, sanitation and related services".

According to The Mvula Trust Strategic Plan (2003:4) there are a number of

organizational challenges Mvula had to grapple with, which invariably necessitated the

strategic review process within the entire organization. The operating environment was

continuously changing and therefore required a renewed commitment to professionalism

and emphasis on skills development. Mvula had traditionally seen itself as a

development and advocacy agency, promoting bottom-up approaches to project

planning, implementation and management in the interests of equity and sustainability.

In view of the changing context of its work during an era of municipal service delivery,

Mvula needed to update its approach and terminology to make explicit its commitment

to equity, affordability and sustainability. It had to become considerably more pro-active

in communicating its relevance and value to municipalities. Due to this mandate shift,

Mvula had to partner with both municipalities and Community-Based Organization

(CBOs) to ensure sustainable water and sanitation service delivery and local economic

development.

This partnership could be realized through the provision of support in the areas of project

planning, project implementation, project management, policy development as well as

the development of effective community-based service delivery models. Some

municipalities who previously never had a relationship with Mvula found themselves

somehow compelled to honour the contractual obligation Mvula had with DWAF and to

further accept Mvula's espoused-service delivery model which they might not be in

favour of. Furthermore municipalities increasingly regarded themselves as development

implementers, with all the necessary capability and capacity, in a supply-driven

environment, and thus growing tensions were emerging around the acceptability of

Mvula's approach, with its emphasis on community management.

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Whether this advocacy role would be recognized and appreciated by Local Government

still has to be seen. It appeared that Mvula was not the preferred service provider for

water work for most municipalities since they regarded this as their core competency.

This implied that Mvula's core business was gradually changing from water and

sanitation development to sanitation development only, which was the competency of

many toilet contractors although employing a different implementation method. Owing

to this fierce competition, Mvula had to vigorously market itself in order to secure work.

Other factors that compelled Mvula to change its strategic direction were:

a The loss of income from Build, Operate, Train and Transfer (BOTT) programme

which came to an end in July 2003. This was Mvula's strongest financial

performer or cash cow.

• The loss of Implementing Agent (IA) Status since most municipalities had taken

on the role of Implementing Agents themselves, which Mvula previously secured

for itself. In the new era, Mvula was either contracted to assist the municipality as

a Programme Manager (PM), or was contracted as a Project Agent (PA). There

was no longer the same scope to levy a percentage fee for management or

administration.

• The change in Mvula's project implementation role and method since the

organization could no longer afford to outsource the bulk of implementation work

to external project agents. The approach of using Project Development Facilitators

(PDFs) to oversee the work of Project Agents, with PDFs in turn managed by

Programme Managers was no longer affordable. PDFs either had to be up-skilled

to take over the function of Programme Managers, or PDFs themselves needed to

undertake the bulk of implementation work.

It is from this premise that this study attempts to evaluate the extent to which Mvula's

crafted strategy has been able to support the water services delivery role of developmental

local government in northern KwaZulu-Natal. It will further look at whether the said

strategy document was developed according to contemporary strategic planning

processes.

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1.3 Problem statement

The challenge of water services provision in South Africa and many other developing

countries is a very great and more complex than perceived. As mentioned earlier, Mvula

was thus established as a direct response to water and sanitation backlog experienced in

both rural and peri-urban areas that would eventually be serviced by Local Government.

The organization had made tremendous contributions in the water services sector since

1993 until the establishment of Local Government in year 2000. The collaboration Mvula

had with DWAF was mainly through the provision of support in the areas of project

implementation and management as well as development of policies, sound planning and

funding mechanisms, effective delivery models, training and building of institutions.

In the previous dispensation, Mvula had also assumed a role of an advocacy organization

on behalf of communities in need of such water services. By advocacy it is meant that

where necessary Mvula conducted an analysis of community development needs with a

view to conscientizing relevant government departments about such expressed needs.

This literally meant advocating on behalf of disadvantaged communities. Promoting

bottom up approaches in this context implied that project conceptualization was

undertaken in direct consultation with its target beneficiaries or end-users who could

articulate their own development needs to which the intended project should respond.

This was regarded as Demand-Responsive Approach (DRA). With the advent of a

democratic era, this historical alignment with DWAF became a subject of stern criticism

by many elected municipalities that had a WSA status. Some municipalities even resented

some of the DWAF's prescriptions for the sector and saw Mvula as an agent of DWAF

and thus growing tensions were emerging around the acceptability of Mvula's approach,

particularly with its emphasis on community management (The Mvula Trust, 2003).

Consequently Mvula needed to update its approach and terminology to make explicit its

commitment to equity, affordability and sustainability in an era of municipal service

delivery. It had to become considerably more pro-active in communicating its relevance

and value to municipalities.

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Mvula's daunting challenge was to prove its rationale for existence as a necessary

intermediary or delivery arm for water services supporting municipalities. Local

government which previously never had a constitutional mandate to deliver water

services, needed to swiftly develop the necessary capability and capacity in a supply-

driven environment in order to address the backlog in terms of both services provision

and the required infrastructure. Although this was one most important element of

transition in the country, the development of viable and effective developmental local

government, which meets the needs and expectations of its constituency continued to be a

challenge for national government as well. In order to survive those major changes,

Mvula had to carve its new niche in the water sector by positioning itself as a strategic

ally for municipalities in the delivery of water services.

The foregoing account has outlined the management dilemma facing Mvula as a result of

the changing operational environment. In response to those inevitable political and

operational changes, it became imperative for Mvula to embark on a strategic planning

exercise. This process was an endeavour to better prepare itself for the future so that it

could remain relevant and indispensable within the water sector. As to whether Mvula's

newly crafted strategy has been able to support the water services delivery role of

developmental local government with special reference to three northern KwaZulu-Natal

municipalities is the issue at hand in this research study.

1.4 Purpose of the study

The purpose of this research study is to conduct a rigorous evaluation of Mvula's

Strategic Business Plan (SBP) developed in 2003 with a view to supporting the water

services delivery role of developmental local government. The study also looks at how

the developed strategy supports the organization's emerging mission, which is to improve

the health and livelihoods of poor and disadvantaged South Africans in rural and peri-

urban communities through facilitating delivery of integrated and sustainable water,

sanitation and related services.

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The extent to which the crafted five-year strategy has supported three northern KwaZulu-

Natal District Municipalities of Uthungulu, Umkhanyakude and Zululand to deliver water

services to their respective communities in a more efficient, cost-effective and sustainable

manner will be looked at. This research study also subjects Mvula's strategic plan to

contemporary strategic planning processes. It does that through an extensive literature

search on this subject. Finally, the study will provide recommendations that will enable

Mvula to firm up and effectively execute its strategic plan.

1.5 Research questions

In order to meet the purpose of this study, the research questions mentioned hereunder

will be addressed:

1.5.1 Has Mvula's strategy been crafted in line with contemporary strategic planning

processes?

1.5.2 Is Mvula delivering on the services requirements of Local Government particularly

in the municipalities of Uthungulu, Umkhanyakude and Zululand?

1.5.3 Does the existing strategy of Mvula enable Local Government to meet its service

delivery mandate?

1.6 Hypotheses

The study attempts to test the following assumptions that have been postulated:

1.6.1 Mvula's strategy has been crafted in line with contemporary strategic planning

processes.

1.6.2 Mvula is delivering on the services requirements of Local Government pertaining to

the municipalities of Uthungulu, Umkhanyakude and Zululand.

1.6.3 The existing strategy of Mvula enables Local Government to meet its constitutional

service delivery mandate.

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1.7 Limitations of the study

Mentioned below are practical constraints that have been identified for the research study:

1.7.1 There are geographical limitations in that the study involves only three northern

KZN District Municipalities instead of eleven (11) Municipalities which comprise

the whole of KwaZulu-Natal. These are the only municipalities that were supported

by the Empangeni Region of Mvula. The study population is scattered over three

wall to wall District Municipalities which are virtually 300 km apart.

1.7.2 As a result of financial limitations, other areas or regions where Mvula is operational

are not covered by the study.

1.7.3 Time constraints exist in that this study is only conducted over a short period of six

months.

1.9 Structure of the study

The research report is structured as follows:

Chapter One

This is an introductory chapter that presents the background and the motivation of the

research. It further looks at the problem to be investigated as well as the objectives of the

study.

Chapter Two

A detailed review of Mvula case study is presented in this chapter. The review entails the

historical background of Mvula, its services, its geographic spread as well as its customer

base.

Chapter Three

This chapter provides the theoretical framework for strategic planning and strategy

evaluation. It describes in detail the rigour strategic planning from a diversity of

perspectives. It pulls together the strands of the "what" element of strategy gets evaluated

to gauge the correctness and effectiveness of the chosen strategy. This is evaluated

against what Mvula has done.

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Chapter Four

The research methodology is presented here and a detailed account of the research design,

the sampling procedure and methods employed for data collection, namely, the research

instrument. It further gives a detailed data analysis with the specific statistical tool used.

Chapter Five

The chapter presents findings or results and the detailed analytical discussion of results

obtained from the questionnaires administered to the officials of three District

Municipalities under study.

Chapter Six

This is the last chapter of the case study presenting both the conclusions and

recommendations. This chapter points out the strengths and weaknesses in the developed

strategy. It will therefore reinforce positive aspects of Mvula's strategy and address any

gaps or shortcomings that may exist in the crafted strategy.

1.10 Concluding summary

This chapter has outlined the rationale, objectives, and limitations of the study as well

as the problem to be investigated. These issues were considered in an attempt to

evaluate the extent to which Mvula's Strategic Plan (2003-2008) supports the water

services delivery role of Umkhanyakude, Uthungulu and Zululand District

Municipalities. The next chapter gives a detail account on the historical background of

Mvula, its services or products, its organizational challenges, its geographic spread as

well as its customer base.

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CHAPTER TWO

CASE STUDY

2.1 Introduction

In chapter one, a brief overview of the background of Mvula was given. The specific

circumstance under which Mvula was established was the severe drought that was

adversely affecting rural and pre-urban people. This situation was exacerbated by the

collapse of the former homeland administrations that were responsible for maintaining

rural water supply infrastructure. There was an urgent need to address the situation, at

least until the new government could set up a rural water supply and sanitation

programme. The following details on Mvula were obtained from The Mvula Trust: Still a

blue-chip NGO? (2003) document, with the permission of the Empangeni regional

manager.

2.2 Historical overview of Mvula

Mvula's initial funding was provided by the Independent Development Trust (IDT) and

the Kagiso Trust/European Union (KT/EU). The former was managing a South African

parliamentary grant whereas the latter was managing the European Union finance. The

third co-founder, the Development Bank of Southern Africa (DBSA) provided loan

finance credits. However, from the outset Mvula was essentially a non-governmental,

independent initiative managed by an independent board building on the initiative of a

number of individuals active in the Standing Committee on Water and Sanitation

(SCOWSAS).The latter was a visionary civil society initiative which functioned during

the transition period from apartheid to democracy. The founding Board of Trustees

consisted mainly of representatives of the three co-founding organizations, rural

development activists and sector professionals. At inception, the organization was

conceived as a four-year project, whose future would depend on performance in the early

years and future needs.

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The aim was to set up a fast and effective mechanism to fund community driven water

and sanitation projects and alleviate the critical situation in the early 1990s, drawing its

approach from international practice, adapted to the particular environment in South

Africa. In the transition Mvula was able to play a critical advocacy and policy

development role in support of the new government. At the outset, therefore, the

intended relationship between Mvula and the new government was defined as one of co­

operation and constructive engagement. This feature of Mvula was particularly significant

and visionary at the time, since there was a strong tradition of NGOs in the apartheid era

being anti-government and activist in their orientation. Subsequent events have shown

that many, if not most, of the rural development NGOs that were established under the

apartheid regime, found it difficult to adopt a different stance towards government after

the transition to a democratic era (The Mvula Trust: Still a blue-chip NGO, 2003). Mvula

was also different in that it was consciously developed as a professional organization

emphasizing efficiency and paying market related salaries, as distinct from the

voluntarism ethic promoted by most NGOs. However, at the same time it also espoused

traditional NGO principles, such as a focus on the poor, on people-centred development,

on appropriate technologies, on being mission-driven rather than profit-oriented and on

process as much as product.

One of the first initiatives of the new government in 1994 was to develop a water supply

and sanitation White Paper. Mvula was a major contributor to this first sector policy

document, and all the principal authors were strongly influenced by international

experience and in particular by the lessons of the UN Water and Sanitation Decade

(1980-90). The policy emphasized Demand Responsive Approaches (DRAs), cost

recovery, community involvement and all the other policy approaches being promoted by

Mvula. During the first four years of Mvula's existence (1994-1997), the policy

environment was very favourable and supportive, at least on paper. In practice there was

little support for real demand responsiveness, community management and other critical

elements of sustainable development.

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2.3 Co-operation agreement with DWAF

In January 1996 the co-operation agreement signed between Mvula and DWAF came into

effect and that year over R40m of projects were approved for funding by DWAF. At the

same time the new transitional local government structures, elected in 1995, started

making their presence felt, and DWAF began setting up planning forums that included

local government. However, Mvula was still free to implement projects very much in

accordance with its own approach. The most significant initiative taken by Mvula in 1996

was the commissioning of an external evaluation. Its significance in the context of the

legal and institutional framework was its failure, in hindsight, to take into account the

new constitution approved that year which, together with the emergence of rural local

government, was to have a profound impact on the environment in which the organization

would have to operate over the succeeding years. The evaluation gave a firm endorsement

of the Mvula approach and the results achieved in the field, and recommended the

transformation of Mvula into a permanent organization. The next significant change in

the legal and institutional framework came in August 1997, with the promulgation of the

Water Services Act. It established the legal framework for the provision of water services,

defining the role of local government and, in terms of the Mvula approach, made it

possible for Community Based Organizations (CBOs) to be appointed as legally

recognised Water Services Providers (WSPs).

Some of the funding provided by the Mvula-EU NGO Support Programme, approved that

year, was to be used in the years ahead to try and establish the first community based

organization as a water services provider (CBO-WSP). In January 1998, Mvula-DWAF

Agreement was renewed for a further five years and a large number of new projects,

under the so-called RDP4 round of funding, were approved. By this year the pressure of

the differences between the DWAF and Mvula approaches to project implementation

forced Mvula to do away with its policy of community contributions to capital costs. It

was no longer possible to implement projects funded by DWAF in the same way as those

funded by the original core fund, because on DWAF projects no community contribution

was required. This was another example of how DWAF ignored its own policy of demand

responsiveness.

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By 1999 Mvula had become aware of the need to shift its focus, in terms of partnering

with government, from DWAF to local government. A major effort was made over the

succeeding years, to educate Mvula staff about the new institutional set-up and to develop

relationships with the new rural municipalities. In 2000 the final demarcation of local

government was completed and the second local government elections were held later in

the year. At the same time the Division of Revenue Act (DoRA) of 2000 introduced

conditions for DWAF funding that gave considerable decision-making powers to

municipalities. Successive DoRAs have pushed this shift even further and, as from the

2002/2003 financial year, all work carried out in the implementation of projects under the

DWAF capital programme would be done on direct appointment from municipalities.

2.4 Change in the funding environment

Another key driver of change within Mvula, and in the sector in general, was the funding

environment. The said changes included the nature of funding: who provided it, what

kinds of activities different funders would support, and how that funding was accessed

and the impact on those receiving the funding. The differences between core-funding and

project specific funding with an implementation fee, and between funding allocated by

government and that provided directly by donors, had a fundamental impact on how an

organization was structured, how it operated, its organizational culture, its political

independence and many other aspects. Mvula was set up with a core fund of R98m from

the Independent Development Trust (IDT) and the Kagiso Trust/European Union

(KT/EU). The third co-founder, the Development Bank of Southern Africa (DBSA)

provided loan finance credits which subsequently increased the initial funding to RIOlm.

By the end of 1996, most of this funding had been committed and the remainder was

utilized to top up operating income earned on DWAF and donor funded projects, to cover

operating costs, until the end of 1998. From the 1999-2000 financial years, all of Mvula's

operating costs had been covered by income earned from project implementation fees.

This shift in the nature of project funding required a major shift in the organizational

culture and way of operating of Mvula.

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In 1998 time sheets and a time billing system were introduced and "Mvula Facilitation

Costs" were included as a line tern on project budgets for the first time, even for non-

infrastructure projects. The effectiveness with which the organization managed this

budget item was still a long way from being satisfactory. The two main challenges that

faced Mvula after the first five years were adapting to the new role of local government

and to operating without core funding. With regard to the first, the leadership that

followed the first regime played a decisive role and, in balance, was as successful as the

conditions and funding constraints allowed. With regard to the second challenge, the

change in leadership to one that was more focused on internal systems and processes and

on coming to terms with the new environment was fundamental in ensuring Mvula's

survival and continuing relevance.

2.5 Mvula's influence on water services' policy development

Regional managers played a particularly pivotal role with relatively little support from

head office, in implementing the decentralization of project management authority to the

regions, and in changing the organizational culture to one of funding operating costs from

claiming project management fees. Mvula could rightfully be proud of its achievements

in this regard, although much still needed to be done to improve systems and project

management efficiency and effectiveness. It was vitally important in recruiting staff in the

future that Mvula continued to strike a sensible balance between professional competence

and experience on the one hand, and commitment to Mvula's developmental vision and

ethos on the other. Either without the other would not enable Mvula to achieve its mission

and objectives.

Mvula's close working relationship with DWAF enabled it to influence government

policies by demonstrating good practice and by having a seat at the table when policy

issues were considered. In particular, its focus on community based approaches and its

understanding of poor community priorities and capabilities had influenced the

government's approach to rural development, especially DWAF's approach to

Institutional & Social Development (ISD). This impact on policy had been particularly

strong in sanitation.

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The approach used until recently on all government sanitation programmes was piloted by

Mvula between 1994 and 1997 and Mvula had a major input into the sanitation policy,

published in 2001. Over 80% of the government's sanitation programme has been

implemented by Mvula, and its sanitation specialists had been contracted to advise

government on the current scaling up of the programme and to assist in training

government officials. However, its impact on water policy had been subtler. While few

of the elements of Mvula's demand responsive, community management model had been

fully adopted by government, Mvula worked very closely with DWAF over the years,

developing the tools and guidelines used in the implementation of the government

programme. Mvula was and is a member of the Water Services Sector Leadership Group,

which is led by the government, and was one of the two representatives of civil society on

the government's Water Services Programme Steering Committee, Masibambane. Mvula

was also a member in its own right, of the National Sanitation Task Team, and was

represented on some provincial sanitation and sector coordinating bodies.

Some of the major inputs Mvula had made to policy and good practice include:

• Input into the 1994 White Paper.

• Influence on sanitation policy, including approach to school sanitation.

• Management of Water Law Review, leading to National Water Act.

• Development of tools and guidelines for DWAF.

• Impact on DWAF approach to training and capacity building.

• Implementation of a number of important Water Research Commission projects.

• Major role in 1998 Best Practices Conference.

• Introduction of PHAST into SA.

• Revisiting projects initiative.

• Evaluations of DWAF projects.

a Promotion of CBOs as Water Services Providers.

• Positive influence on approach to ISD in two BOTT consortia.

• Input into new Water Services White Paper.

• Developing a more appropriate model for NGOs to thrive in the new

environment in the sector.

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However, all this work impacted mainly on DWAF and very little on local government.

Effectively, the sector had to start with an almost clean slate to do the same work with

local government, at a time when there was virtually no independent funding to do so.

The only role Mvula was able to play was on appointment by DWAF or municipalities.

During the early years these principles were just principles that were desirable as a

measure of good practice. Over time, as the organization transformed itself into a project

management agency and began to compete with the private sector for work, they became

absolutely essential for Mvula's survival in an increasingly competitive environment.

2.6 Mvula's approach to project management

When Mvula began funding projects in early 1994, its practice was guided only by a

policy document and a set of rules for appraising funding applications and channeling

funds. The contract between Mvula and the project committee was the most detailed

description of project management rules. Funding applications, appraisals, approvals and

disbursements were tracked by means of a software package called the Project Tracking

System (PTS), developed by Praxis for the Kagiso Trust. It functioned effectively as a

tracking system and electronic document filing system, but could not track expenditure

against specific project budget line items.

In 1996 the first set of project implementation procedures and guidelines for staff and

consultants was developed by the regional manager of the Northern Province and the

Projects Director, based largely on the experience of the Northern Province, which had

the largest and most developed programme at the time. Staff and consultants were

workshopped on the document in a series of workshops in all four provinces in which

Mvula was operating. At the same time unsuccessful attempts were made to modify the

PTS to enable it to manage project expenditure against line items. The following year

this document was considerably improved through rationalizing and updating it and

linking the provision of certain key documentation to the approval of disbursements, with

check lists as key control tools. It is important to note that, until 1999, all project budget

management and control were carried out centrally at Head Office, by the Projects

Administration Department, which reported to the Financial Director.

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It was mainly due to the inability of this work to be done effectively at Head Office, as

the number of projects increased enormously every year that the decision was taken to

decentralize this function in 1999. However, regions, including Empangeni, were given

little support to do any better, and the variable results tended to reflect the individual

abilities of different regional managers. The PTS was used only by some regions and this

contributed to the very poor document storage and record keeping which then afflicted all

offices. Different software packages were used for time capturing and billing. Excel was

used for managing project budgets, with poor reconciliation effected between this system

and the accounting system. The ineffectiveness of financial accounting in Mvula had also

been a major factor in the generally poor project and financial management in the

organization. The original system was designed to manage a core fund and was not

adapted to cope with multiple funders and different kinds of funding. Not enough

attention was paid to this area of Mvula's operations. It was treated as a subsidiary

support service, instead of as one of the three core functions of Mvula, namely project

implementation, policy development and financial management.

In 1999, a new accounting system was designed and implemented, by an independent

accounting company. The same company designed and implemented a new internal audit

programme. However, although on paper the system was good, in practice it had not

worked as intended. The result had been a continuation of most of the problems of the

past, most notably delays in auditing of accounts, and poor project budget control, leading

to large amounts of potentially bad debt. The system was being redesigned and the new

one would come into effect in July 2003. It included further decentralization of authority

to regions, linked to a more effective internal audit regime. The weakness of internal

audit, from inception until year 2002, had been a major contributor to poor project

management in Mvula. This was then changing and it was thought that the introduction

of the Quality Management System (QMS) would go a long way to improving Mvula's

effectiveness and efficiency as a project and programme manager.

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2.7 The organization's changing work context and portfolio

Until 2000 Mvula's main role in project implementation was as that of an Implementing

Agent (IA) of DWAF water projects and the 10% fee earned as an IA, together with the

time based facilitation fee were adequate to cover operating costs. Most municipalities

took on the role of Implementing Agents themselves, which Mvula had previously

secured for itself. Mvula was either contracted to assist the municipality as a Programme

Manager (PM) or was contracted as a Project Agent (PA). There was no longer the same

scope to levy a percentage fee for management or administration. Sanitation became the

main activity and the income earned, particularly on contract directly to municipalities,

was considerably less than that earned previously on water projects. Although it appeared

that a small surplus of income over expenditure was generated in the 2001/02 financial

year, the trend was decidedly negative.

Mentioned hereunder are the core values Mvula agreed to adopt in November 2001 in

to

a

a

a

ensure organizational cohesion

Empathy

Loyalty

Innovation

Honesty

Respect

Commitment

Adaptability

Staff development

Learning organization

Good communication

despite the changing work context:

The foregoing values are grounded on the broad development principles, forming the

cornerstone of any social development intervention, which the organization fully

embraced, and these are:

• The principle of people participation.

• The principle of sustainability.

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• The principle of integrated development.

• The principle of poverty orientation.

• The principle of target group orientation.

The core business of Mvula then involved the following clearly defined elements:

• Sanitation Implementation Management (as a Project Agent).

• Water Implementation Management (as an Implementing Agent).

• General Social Facilitation (as an ISD Consultant).

• Policy development and advocacy.

Mvula's products and services could then be defined as follows:

• Project / Programme Management.

• Project Development Facilitation.

a ISD capacity building.

• Policy development and advocacy.

In consequences of its changing work portfolio, Mvula's emerging mission was "to

improve the health and livelihoods of poor and disadvantaged South Africans in rural and

peri-urban communities through facilitating delivery of integrated and sustainable water,

sanitation and related services". In order to achieve this mission, the following strategic

intents were cited:

a To support local government in the delivery of sustainable, reliable and

affordable water services.

• To test and advocate sustainable models of cost-effective water services

delivery; and

• To maximize the capacity building and economic benefits of water investments

for poor communities.

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2.8 The development of Mvula's five-year strategic plan

For Mvula to operationalize the above strategic intents, they had to develop a five-year

strategic plan. The following strategic objectives were identified as key to repositioning

Mvula as a strong, viable NGO role player in the sector (The Mvula Trust, 2003):

• Strategic Objective 1: Reposition Mvula

• Strategic Objective 2: Financial Viability

• Strategic Objective 3: Performance Management

• Strategic Objective 4: Strengthen Integration of Policy, Strategy and

Implementation

The main areas under which the strategy would be managed were:

• The organization's internal resources

• The external environment within which the organization operated

• The organization ability to add value to what it does.

In order to do this, Mvula further cited the following as their focus areas:

• Strategic analysis: This involved the examination and analysis of the

organization, its mission and objectives.

• Strategy development: Two strategy options were developed and one

eventually selected. The first one proposed the closure of Regional Offices

that had a huge deficit. Another option related to the strengthening of all

operations within Mvula to render it an efficient strong and viable NGO. The

latter was then selected and pursued.

• Strategy implementation: Although very few aspects of the chosen strategy

have been implemented.

The strategy development process was shaped and influenced by the Blue Chip document

developed by Palmer Development Group entitled "The Mvula Trust: Still a blue-chip

NGO?" (2003). This document reviews the broad strategic environment in which Mvula

operate. It points to important shifts and changes in the external environment, and

highlights the urgency of making important shifts and changes within Mvula.

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The review is written in six sections, which together build a rounder picture of the current

challenges and opportunities facing Mvula:

• Section 1 asks a core question: What is Mvula's purpose?

• Section 2 reviews the evolution of Mvula into the organization it is today.

a Section 3 asks some tough questions about Mvula's existing mission and

rationale.

• Section 4 updates and takes forward the SWOT analyses undertaken by

each region for Mvula's National Policy workshop in December 2002.

• Section 5 reviews trends and developments in the water sector.

• Section 6 takes this discussion of trends and developments up a level, to

scan some key shaping forces at a national macro level.

2.9 The proposed survival strategy

In a nutshell, Mvula faced three fundamental challenges if it were to survive the

following five years, and that was:

• To generate a surplus of at least R2-m a year to clear its deficit. This would

require improved operational efficiencies and effective performance

management.

• To build the capacity of all staff to respond to the support needs of

municipalities

a To build consensus within Mvula, and understanding beyond the organization of

what it stood for as an efficient NGO that offered integrity, creativity and

professionalism.

Mvula's ability to get there depended upon:

• Staying in business.

a Internal clarity and consensus around its purpose in the sector

a Positioning the organization as a centre of expertise for sustainable service

provision, focusing on basic and intermediate services.

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• Delivering services cost-effectively so that Mvula could generate a surplus to

fund the kind of activities it wished to undertake as a leading advocacy

organization

• A renewed focus on building a strong organizational culture of proud

professionalism, supported by a comprehensive staff training and development

programme straddling policy, application and operational practice.

• Robust performance management systems summarized through a balanced score

card.

• Attuning Mvula better to municipalities' real needs

• Redefining the way it worked

• Building Mvula's credibility as an NGO

2.10 Concluding summary

This chapter has given an elaborate description of Mvula and the process they followed

when crafting their strategy. It is now necessary to provide a contemporary view on

strategic planning processes. The next chapter will therefore focus on the review of

literature that underpins strategic management. Such a review evaluates and compares

the extent to which Mvula strategy has been developed in line with the conventionally

accepted strategic planning processes.

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CHAPTER THREE

LITERATURE REVIEW

3.1 Introduction

The case on Mvula that was outlined in the previous chapter illustrates how this

organization had to rethink and reorganize its business. The resultant strategic plan was

also given. The question to be answered is whether this strategy will fulfill the desired

objectives. In order to interrogate this strategy this chapter provides the theoretical

framework for strategic planning and strategy evaluation. It describes in detail the rigour

of strategic planning by pulling together the strands of the "what" element of strategy gets

evaluated to gauge the correctness and effectiveness of the chosen strategy.

3.2 Defining strategic management

A number of authors have written books on strategic management. For example Jauch

and Glueck (1988:25) define strategy as a unified comprehensive and integrated plan

relating the strategic advantages of the firm to the challenges of the environment. It is

designed to ensure that the basic objectives of the enterprise are achieved through proper

execution by the organization. It can thus be inferred that a strategy is not just any plan,

but a unified plan which ties all the parts of the enterprise together. It is comprehensive as

it covers all the major aspects of the enterprise. All the parts of the plan are compatible

with each other and fit together well, thus it is integrated. Hunger and Wheelen's

(1995:150) view is that corporate strategy specifies the firm's orientation toward growth

and the industries or markets in which it will compete. It can provide a strategic platform

or the ability of the organization to handle businesses in various environments with a

common set of strategic capabilities. David (2001:5) defines strategic management as the

art and science of formulating implementing and evaluating cross-functional decisions

that enable an organization to achieve its objectives. David's definition, therefore,

concurs with Glueck's view that strategic management focuses primarily on integrating

diverse functions to achieve organizational success.

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David (2001:5) also postulates that strategic management is often used synonymously

with the term strategic planning and that the latter term is more often used in the business

world, whereas the former is often used in academia. He further contends that the purpose

of strategic management is to exploit and create new and different opportunities for

tomorrow; long-range planning in contrast, tries to optimize for tomorrow the trends of

today.

In their definition of strategic management, Johnson and Scholes (2002:10) focus on the

direction and scope of an organization over the long term, which achieves advantage for

the organization through its configuration of resources within a changing environment

and to fulfill stakeholders' expectations. The strategy of an organization can therefore be

seen as the matching of the resources and activities of an organization to the environment

in which it operates. This is sometimes known as the search for strategic fit. The notion

of strategic fit is developing strategy by identifying opportunities in the business

environment and adapting resources and competences so as to take advantage of these.

Porth (2003:2) defines strategic management as a process of formulating, implementing

and evaluating cross-functional decisions that enable the organization to define and

achieve its mission and ultimately to create value. According to this definition each step

of the process focuses on one overriding purpose namely value creation. The latter

constitutes the ultimate outcome of successful strategic management no matter whether

the organization is large or small, privately owned or public, for profit or not. During the

strategic management process, various strategies are explored to provide the organization

with the competitive advantage.

Lynch (2003:8) states that corporate strategy is the pattern of major objectives, purposes

or goals and essential policies and plans for achieving those goals, stated in such as way

as to define what business the company is in or is to be in and the kind of company it is or

is to be. This suggests that purpose alone is not strategy, plans or actions need to be

developed to put the purpose into practice.

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From the foregoing definitions, it can be inferred that strategic management can be

viewed as a purposeful and rigorous process of developing the organization's integrated

plan by matching its resources and activities to its operating environment with the

ultimate aim of providing he organization with a competitive advantage or edge over its

industry competitors through value creation.

3.3 Stages of strategic management

Lynch (2003:19) identifies three core areas or stages of strategic management, namely,

strategic analysis, strategic development and strategy implementation. These may

constitute either a sequential or simultaneous approach to strategic management. In the

sequential approach, depicted in the diagram below, one stage follows another for reasons

of clarity and development. On the other hand, in the simultaneous approach, all three

stages may be happening at the same time for different parts of the organization.

Figure 1: Sequential approach to strategic management (Adapted from Lynch 2003:19)

(.••''. ^ - ^ .Strategic f \ / Strategic'" I development; ) I implementation

Ik

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Looking at the above and comparing it with what Mvula did, it seems that Mvula

followed exactly the same process during its strategic planning process which was

sequential in approach:

• Strategic analysis: This involved the examination and analysis of the

organization, its mission and objectives. Mvula senior management and some

Trustees conducted an examination of the objectives and the organization's

relationship with its environment. Coupled with that was the analysis of the

organization's resources.

• Strategy development: Various strategy options had to be developed. Two

strategy options were developed and one eventually selected. The first one

proposed the closure of Regional Offices that had a huge deficit. Another

option related to the strengthening of all operations within Mvula to render it

an efficient strong and viable NGO that has the ability to develop close

relationships with its new client, namely, local government while

strengthening its existing relationship with DWAF. The latter was then

selected and pursued. It was thought that this strategy option would provide

Mvula with advantages over its competitors that would be sustainable over

time.

• Strategy implementation: A strategy that cannot be implemented is not worth

the paper it is written on. Mvula made an effort to implement the chosen

option across the board. There were however major difficulties in terms of

motivation, regional or provincial dynamics, realignment of operations

between Head Office and Regional Offices, and Local Government

negotiations. Mvula did not have a dedicated champion or driver of the major

strategic changes that had to be implemented over time. Consequently, the

organization had to retrench and/or not to replace some of its staff that

resigned at both Head Office and Regional levels. The Empangeni Region was

no exception as it lost its two Engineers, one Project Development Facilitator

and a Financial Administrator. The most drastic action that had to be taken

involved the closure of the Ulundi Satellite Office (under Empangeni Region)

and some Regional Offices such as Mpumalanga, Kokstad and Umthatha.

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On the basis of the foregoing account, it can be concluded that Mvula's crafted strategy

has not enabled the organization to carve its new niche in supporting the service delivery

role of local government in many aspects let alone sustaining the operational efficiency

levels that existed prior to the strategic planning process. This can be pointed out as a

pronounced shortcoming hence a need for strategic review. Deresky (2002:223)

highlights the said shortfall stating that the first phase of the strategic management

process, the planning phase, starts with the company establishing (or clarifying) its

mission and its overall objectives. The next two steps comprise an assessment of the

external environment that the firm faces in the future and an analysis of the firm's relative

capabilities to deal successfully with that environment. Strategic alternatives are then

considered, and plans are made based on the strategic choice. The second part of the

strategic management process is the implementation phase. Successful implementation

requires the establishment of the structure, systems, and processes suitable to make the

strategy work.

Although some writers identify only three major steps of the strategic management

process, in this study five interrelated steps as espoused by Thompson and Strickland

(2003:6) have been used. These authors view a company's strategy as encompassing the

competitive efforts and business approach that managers employ to please customers,

compete successfully and achieve organizational objectives. This suggests five

interrelated managerial tasks of the strategy formulation process which entail:

• Developing a strategic vision & business mission

• Setting objectives

• Crafting a strategy to achieve the objective

• Implementing and executing strategy

a Evaluating performance, monitoring new development and initiating corrective

action

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Porth (2003:3) also concurs with the five steps, adding that each step contributes towards

the challenge of rewarding key stakeholders, especially customers, employees and

ultimately owners. These steps are depicted in Figure 2 below:

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Figure 2: The five tasks of strategic management (Adapted from Thompson & Strickland 2003:7)

Taskl Task 2 Task 3 Task 4 Task 5

Developing a strategic Vision & Business mission

Setting Objectives Crafting a strategy to achieve the objective

Implementing and executing strategy

Evaluating Performance, Monitoring new development and Initiating corrective action

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3.3.1 Developing a mission statement and strategic vision

The mission statement identifies the enduring purpose of the organization and answers

questions such as Who are we? What is our business? Why do we exist? Hence, it is

grounded in the present, that is, it focuses on the current markets and customers served by

the organization. Put in simpler terms, the mission statement tends to deal with a

company's present business scope, namely, "who we are, and what we do". The mission

statement broadly describes an organization's present capabilities, customer focus,

activities and business makeup (Thompson and Strickland, 2003).

On the other hand, the strategic vision or strategic intent is a roadmap of a company's

future - providing specifics about technology and customer focus, the geographic and

product markets to be pursued, the capabilities it plans to develop and the kind of company

that management is trying to create. A strategic vision thus reflects management's

aspirations for the organization and its business, providing a panoramic view of where it is

going. It points out an organization in a particular direction and charts a strategic path for

it to follow. Harrison (2003:18) defines strategic vision as the statement that expresses

what the organization wants to be in future, which may involve a fundamental change in its

business. Ordinarily, developing a vision statement is considered the first step in strategic

planning. Therefore both the vision and mission provide long term direction, delineate

what kind of enterprise the company is trying to become and also infuse it with a sense of

purposeful action. Over and above or in lieu of the vision and mission statements an

organization may have a credo, which serves essentially the same purpose as a mission

statement. A credo can be defined as a statement of the organization's values or a

philosophy of business.

The new mission developed by Mvula during this stage was to improve the health and

livelihoods of poor and disadvantaged South Africans in rural and peri-urban communities

through facilitating delivery of integrated and sustainable water, sanitation and related

services.

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In order to achieve this mission, the following strategic intents were cited:

• To support local government in the delivery of sustainable, reliable and affordable

water services.

a To test and advocate sustainable models of cost-effective water services delivery;

and

• To maximize the capacity building and economic benefits of water investments for

poor communities.

3.3.2 Situation analysis

This is a careful and ongoing assessment of the organization's external and internal

circumstances. The situation analysis is performed in two parts, namely, an internal and

external audit. An internal audit tends to identify the organization's Strengths and

Weaknesses (SW) whereas an external audit determines Opportunities and Threats. The

latter audit is also known as environmental scanning. Collectively, these audits are referred

to as a SWOT analysis. Ambrosini (1998:122) defines the SWOT analysis as "a popular

tool used by managers as an organizing framework for intuitive information and as a means

of summarizing and integrating more formal analyses about the external operating

environment and an organizations current resources and capabilities".

Strengths can serve as a foundation for building a competitive advantage, and weaknesses

may hinder it. So by understanding the four aspects of its situation, a firm can better

leverage its strengths, correct its weaknesses, capitalize on golden opportunities and deter

potentially devastating threats (Internet 1). On the other hand Harrison (2003:17) broadly

defines situation analysis as an analysis of stakeholders inside and outside the organization

as well as other external forces. He further contends that this analysis should be concluded

at both the domestic and international levels. Figure 3 below illustrates the strategic

management model championed by Harrison (2003) as well as analyses involved therein.

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gic management process (Adapted from Harrison 2003:17)

Define / clarify mission and objectives

i '

Access environment for threats, opportunities

ir

Assess internal strengths and weaknesses

^ r

Consider alternative strategies using competitive analysis

i '

Choose strategy

^ '

Implement strategy through complementary structure, systems, and

operational processes

i

Set up control and evaluation systems to ensure success, feedback to planning

i

'- ^-

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Harrison's approach to strategic management identifies two stages, namely, strategic planning

and implementation. In this model strategic planning entails defining the organization's mission

and objectives, the SWOT analysis as well as the selection of the strategy after a thorough

consideration of available alternatives. The next stage, implementation, involves putting the

chosen strategy into use and the establishment of control and evaluation systems to ensure

feedback to the initial planning process. On the other hand the three-stage approach espoused by

Lynch (2000) includes strategy analysis, strategy development and strategy implementation. The

first step, strategy analysis, involves the examination and analysis of the organization, its mission

and objectives, its resources and its relationship with its operating environment.

During the second stage, various strategy options are developed and one is eventually chosen.

The final stage, implementation, entails the enactment of the chosen strategy. The comparison

between the two approaches reveals both similarities and differences. They are both similar in

terms of processes to be followed by an organization during strategic management. The major

difference lies in that Harrison identifies only two stages whereas Lynch (2000) looks at strategic

management as a process comprising three clearly defined sequential stages. Both approaches

are geared towards the implementation and regular evaluation of the chosen strategy.

The internal audit, conducted as an integral part of the situation analysis, concerns itself with an

evaluation of the organization's financial condition as well as a survey and assessment of

infrastructure, human resources, technology development, procurement, inbound and outbound

logistics, operations, marketing and sales and support services. Michael E. Porter (in Harrison,

2003) developed a diagrammatical representation figure of organizational processes, which he

divided into primary and support activities that create value for the customer. This is what is

called the value chain (Figure 4). The value chain is a useful tool in identifying potential sources

of competitive advantage. According to this framework value-adding activities are a source of

strength of competitive advantage if they meet such requirements as value uniqueness, non-

substitutability and inimitability.

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Figure 4: The value chain (Source: Harrison 2003:83)

Support y Activities *

Inbound Logistics

Administration

Human'Resource Management:

Technology Development

Resource Procurement

Operations Outbound Logistics

Marketing and Sales

Primary Activities

Service

YZ

Inbound logistics includes activities associated with acquiring inputs that are used in the

product such as warehousing, materials handling, and inventory control. The term

"operations" refers to transforming inputs into the final product through activities such as

machining, assembly, molding, testing, and printing. Outbound logistics are activities

related to storing and physically distributing the final product to customers, such as finished

goods warehousing, order processing, and transportation. Marketing and sales include

processes through which customers can purchase the product and through which they are

induced to do so, such as advertising, distribution of catalogues, direct sales, distribution

channeling, promotion, and pricing. Finally, service refers to providing service to enhance

or maintain product value, such as repair, parts supply, or installation. Organizations also

engage in activities that support these primary functions. These activities are placed above

the primary activities in the value chain diagram. Resource procurement refers to the actual

purchase of inputs, and not to the inputs themselves or to the way they are handled once

they are delivered. All of the primary processes need purchased resources, many of which

are not raw materials. Examples of these inputs include typewriters, accounting firm

services, and computers.

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Technology development refers to learning processes, which result in improvements in the

way organizational functions are performed. Human-resource management includes human-

based activities such as recruiting, hiring, training, and compensation. Finally,

administration consists of general-management activities such as planning and accounting.

The dotted lines connecting most of the support activities with the primary activities

demonstrate that the support activities can be associated with each of the primary activities

as well as support the complete chain. Administration is the only exception, since it applies

to the complete chain instead of to any one unit. Profit is found at the right side of the chain,

an indication that firms can achieve higher profit margins through the development of

competencies and superior resources based on their value-chain activities. The external audit

on the other hand, concerns itself with external factors or forces or trends outside the

company that affect its ability to create value. Such external forces create Opportunities

and/or threats for an organization. During the situation analysis, the external environment is

monitored and emerging or potential strategic opportunities and threats are identified. The

external environment of any organization entails both a macro and task environment.

The former is made up of broad forces such as technology, economic and social conditions,

demographic trends and political and international forces. The task environment comprises

customer's competitor's supplier's creditors, government agencies and regulators. Each

component of the external environment may have a critical influence, either positive

(opportunity) or negative (threat) on the organization and its ability to create value. The

monitoring and evaluation of each component become a critical factor during situation

analysis. The external audit not only informs strategic choice, but through a feedback

mechanism, may suggest the need to revise the firm's vision and mission (Porth, 2003).

3.3.3 Setting strategic objectives and crafting a strategy

Thompson and Strickland (2003:10) state that "objectives are the 'ends' and strategy is the

'means' of achieving them". Strategic objectives relate to outcomes that strengthen and

organization's overall business position and competitive vitality. A company's strategy

consists of the competitive efforts and business approaches that managers employ to please

customers compete successfully and achieve organizational objectives.

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Put differently, strategy is the organization's means to achieve its vision, mission and

objectives. The process of crafting a strategy is also known as strategy formulation or

development which includes deciding what new businesses to enter, what businesses to

abandon, how to allocate resources, whether to expand operations or diversity, whether or

merge or form a joint venture and how to avoid a hostile takeover (David 1999). Strategy

formulation takes place at three different levels of the organization namely corporate,

business and functional.

The corporate or organizational level strategy focuses on two major issues:

(i) determining the organization's business scope that is in what business the organization

will compete and (ii) determining how organizational resources are allocated to these

businesses. This strategy defines the organization's domain of activity. Johnson and

Scholes (2002:11) contend that this level of strategy is concerned with the overall purpose

and scope of an organization and how value will be added to the different parts (business

units) of the organization. Corporate level strategy can involve decisions about: business-

closure, disposal, acquisition, re-organization, start up or the impact of doing nothing

different (Williamson et al, 2004).

The next strategy formulation level, the business unit strategy, is about how to compete

successfully in particular markets. The concerns are therefore about how advantage over

competitors can be achieved, what new opportunities can be identified or created in

markets, which products or services should be developed in which markets, and the extent

to which these meet customer needs in such a way as to achieve the objectives of the

organization.

Grant (2002:23) contend that business strategy is concerned with how the firm competes

within a particular industry or market. If Mvula is to prosper within its industry, it must

establish a competitive advantage over its rivals. Hence, this area of strategy or these

domain direction and navigation strategies are referred to as competitive strategies. A

strategic business unit (SBU) is a part of an organization for which there is a distinct

external market for goods or services that is different from another SBU.

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In public sector organizations, a corresponding definition of a SBU might be a part of the

organization or service for which there is a distinct client group, for instance, Department

of Health and Department of Housing.

The third level of strategy is at the operating end of an organization. Here there are

functional or operational strategies, which are concerned with how the component parts of

an organization deliver effectively, the corporate and business level strategies in terms of

resources, processes and people. Harrison (2003:19) argues that functional level strategy

gives "details of how functional resources areas such as marketing, operations and finance

should be used to implement business-level strategies and achieve competitive advantage.

Basically, functional-level strategies are strategies for acquiring, developing and managing

organizational resources". Functional strategies may also attempt to integrate activities

(linking strategies) to create internal capabilities across functions. In conclusion for

simplicity sake, it is sometimes useful to think of corporate-level strategies as "Where to

compete?" business-level strategies as "How to compete in those areas" and functional-

level strategies as "The functional details of how resources will be managed so that

business-level strategies will be accomplished".

These characterizations clearly denote that all three strategy levels should be coherent and

properly co-ordinated. Thompson and Strickland (2003:12) make a very interesting

observation that "strategy is both proactive (intended and deliberate) and reactive

(adaptive)". This simply means a company's actual strategy is partly planned and partly

reactive in that managers shape and reshape it as events transpire outside the company and

as the company's competitive assets and liabilities evolve in ways that enhance or diminish

its competitiveness.

3.3.4 Strategy implementation and execution

Thompson and Strickland (2003:18) point out that the managerial task of implementing and

executing the chosen strategy entails figuring out what must be done to put the strategy in

place, carry it out proficiently and produce good results.

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On the other hand Harrison (2003:20) regards strategy implementation as the process of

managing stakeholder relationships and organizational resources in a manner that moves

the organization towards the successful execution of its strategies, consistent with its

strategic direction. From these two definitions, it can be deduced that the strategy-

implementing or strategy-executing task is the most complicated and time consuming part

of strategic planning or management since it cuts across virtually all facets of managing

and must be initiated from many points inside the organization. It can further be concluded

the strategy implementation concerns the managerial exercise of putting a freshly chosen

strategy into place whereas strategy execution deals with the managerial exercise of

supervising the ongoing pursuit of strategy, making it work, improving the competence

with which it is executed and showing measurable progress in achieving the targeted

results.

According to Thompson and Strickland (2003) identify the following aspects as key to

managing the strategy execution process:

• Building an organization capable of carrying out the strategy successfully.

• Allocating company resources so that organizational units charged with performing

strategy-critical activities and implementing new strategic initiatives have sufficient

people and funds to do their work successfully.

• Establishing strategy-supportive policies and operating procedures.

• Putting a freshly chosen strategy into place.

• Motivating people in ways that induce them to pursue the target objectives

energetically and, if need be, modifying their duties and job behavior to better fit

the strategy requirements of successful execution.

• Tying the reward structure to the achievement of targeted results.

• Creating a company culture and work climate conducive to successful strategy

implementation and execution.

• Installing information, communication and operating systems that enable company

personnel carry out their strategic roles effectively day in, day out.

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• Instituting best practices and programs for continuous improvement.

• Exerting the internal leadership needed to drive implementation forward and to

keep improving on how the strategy is being executed.

Good strategy execution involves creating a strong "fit" between the way things are done

internally and what it will take for the strategy to succeed. The stronger the methods of

implementation fit the strategy's requirements, the better the odds that performance targets

will be achieved. The most important fits are between strategy and organizational

capabilities, between strategy and the reward structure, between strategy and internal

support systems, and between strategy and the organization's culture. Fitting the

organization's internal practices to what is needed for strategic success helps unite the

organization behind the accomplishment of strategy. In short, translating strategy into

action is concerned with ensuring that chosen strategies are working in practice. Thus a

strategy is only meaningful when it is actually carried out. Strategy implementation and

execution may be thought of in terms of the following as reckoned by Johnson and Scholes

(2002:21):

• Structuring an organization to successful performance.

a Enabling success through the way in which the separate resource areas of an

organization support strategies and also the reverse of this the extent to which new

strategies are built on the particular resource and competence strengths of an

organization.

a Strategy very often involves change to day-to-day routines and cultural aspects of

the organization and overcoming political blockages to change.

The ultimate responsibility for leading the tasks of forming implementing and executing a

strategic plan rests with the Chief Executive Officer (CEO), even though other senior

managers normally have significant leadership roles also. The CEO title carries with it the

mantles of chief direction setter, chief objective setter, chief strategy maker and chief

strategy implementer for the total enterprise.

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On the other hand, the immediate task of the board of directors or trustees is to be

supportive critics that critically appraise and ultimately approve strategic action plans and

evaluate the strategic leadership skills of the CEO and others in line to succeed the

incumbent (Thompson & Strickland, 2003).

3.3.5 Strategy evaluation

Glueck et al (1988:385) point out that evaluation is typically assumed to be an after-the-

fact or real-time method of detecting whether the content of strategy is working or has

worked. Thompson (2001:527) contends that there is no single evaluation technique or

framework as such that will provide a definite answer to which strategy or strategies a

company should select or follow at any given time. Particular techniques will prove

helpful in particular circumstances. There are, however, certain essential criteria that

should be considered in assessing merits and viability of existing strategies and alternatives

for future change. They further distinguish between qualitative and quantitative criteria.

Rumelt (in Thompson, 2001) argues that corporate strategy evaluation at the widest level

involves seeking answers to three questions:

• Are the current objectives of the organization appropriate?

a Are the strategies created previously, and which are currently being implemented to

achieve these, still appropriate?

• Do current results confirm or refute previous assumptions about the feasibility of

achieving the objectives and the ability of the chosen strategies to achieve the

desired results.

According to Thompson (2001) key aspects of any proposed changes, in many respects,

concern the strategic logic which relates to:

• The relationship and fit between the strategies and the mission or purpose of the

organization and the current appropriateness of the mission, objectives and the

strategies be pursued.

• The ability of the organization to match and influence changes in the environment.

• Competitive advantage and distinctiveness

• The availability of the necessary resources

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These aspects suggest that matching resources and environment needs involves the culture

and values of the organization and decisions about future changes involve an assessment of

risk, referred to as the environment-values-resources (EVR) congruence.

Figure 5: E-V-R Congruence (Source: Thompson 2001:528)

. . . . . . . . , 'Effective [Opportunities J Y, J concenu^ibn of

-- , \ resoliirees value / ^11 II 1

In order to evaluate or assess the viability of the Mvula's Strategic Plan, three fundamental

criteria identified by Johnson and Scholes (1997:392) can be employed.

These criteria are:

i) Suitability: This is a broad assessment of whether a strategy addresses the

circumstances in which the organization is operating. It is often a qualitative

assessment of the rationale of strategy.

ii) Acceptability: This criterion relates to three issues, namely, the return from a

strategy, the level of risk and the likely reaction of stakeholders.

iii) Feasibility: It is concerned with whether an organization has the resources and

competences to deliver a strategy

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Finlay (2000:371) calls them screening processes or audits that are used to judge whether any

particular initially plausible pathway is practical and appropriate. On the other hand,

Thompson (2001:527) refers to these criteria as appropriateness, desirability and feasibility

respectively. He further states that his categorization has been selected for convenience, as there

is overlap or commonality among them. It is important to emphasize that there is no such thing

as a right or wrong strategy or choice in absolute terms. In other words, there is no single

evaluation technique or framework as such that will provide a definite answer to which strategy

or strategies a company should select or follow at a given time. However certain factors will

influence the effectiveness of strategies and the wisdom of following certain courses of action.

i) Analyzing suitability

Johnson and Scholes (1999:355) state that suitability concerns whether the strategy

addresses the circumstances in which the organization is operating. Assessing suitability can

be a useful basis on which to screen options before more detailed analyses are undertaken

concerning the acceptability and feasibility of those options. Thompson (2001:531) assert

that in reviewing current strategies, assessing the impact of adaptive incremental changes

that have taken place and considering strategic alternatives for the future, it is important to

check that the strategies are consistent with the needs of the environment, the resources and

values of the organization, and its current mission. Simply put, this criterion concerns the

extent to which the crafted strategy would fit the future trends and changes in the

environment or how the strategy might exploit the core competencies of the organization.

This can form the basis of a qualitative assessment concerned with testing out the rationale

of a strategy and as such can be useful for screening options. This process consists of two

stages, namely, establishing the rationale or strategic logic for each option and establishing

the relative merits of each option. The latter is also known as the screening of strategic

options.

• Establishing the rationale

This is concerned with whether a chosen strategy addresses the circumstances in

which the organization is operating or wishes to operate. According to

Thompson (2001), assessing the suitability of strategic option entails evaluating:

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Mission and objectives: Does the strategy fit the current mission and objectives of the

organization? Is it acceptable to the strategic leader and influential leaders?

Effect on the strategic perspective: Does the strategy proposed have the potential for

improving the strategic perspective and general competitive position of the

organization? In other words, will the individual business not only have a strong

competitive position but also be able to make a positive and synergistic contribution

to the whole organization? This means that the organization must be responsive to

changes in the environment and it may wish to be proactive and influence its market

and industry. All the time, it should seek to become and remain an effective

competitor.

Current strategic position: Is the strategy able to capitalize and build on current

strengths, competencies and opportunities, and avoid weaknesses and potential

threats (SWOT)? Is the strategy appropriate or suitable for the current economic and

competitive environment? To what extent is the current strategy able to take

advantage of emerging trends in the environment, the market and the industry?

Available and needed skills, competencies and resources: Are the strategies being

pursued and considered sufficiently consistent that skills, competencies and resources

are not spread or stretched in any disadvantageous way? Does any new proposal

exploit key organizational competencies? This consideration embraces both

opportunity-driven and resource-based perspectives on strategy.

Culture: Does the strategy fit the culture and values of the organization? If not, what

are the implications of going ahead?

E-V-R Congruence: Is there congruence between the environment, values, and

resources?

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Simplicity: Is the strategy simple and understandable? Is the strategy one, which

could be communicated easily and about which people are likely to be enthusiastic?

All the above are depicted in the diagram below.

Figure 6: Establishing the rationale (Adapted from Thompson 2001:532)

Available and needed skills and

resources''1'

\i\ Effect On strategic

perspective

Mission and objectives

Suitability Ni^ffliililillHwiffllwNililiiiilisPffl Appropriateness

E-V-R Congruence',

Mvula's approach to crafting a strategy that would establish the organization as a strong NGO

supporting the water services delivery role of local government was based on the organizational

skills, resources and competencies that were available then. Instead of identifying an aggressive

strategy that would provide the organization with a competitive edge, Mvula still regarded itself

as the largest water and sanitation NGO countrywide. This somehow created a spirit of

complacency. The developed strategy was still based on the previous mission of the

organization. It was not embedded in the emerging mission, that of supporting Water Services

Authorities. The adopted approach did not result in the clear communication of the developed

strategy across the organization. This lack of simplicity of the strategy created in staff apathy and

evident lack of enthusiasm. In a nutshell, most of the screening options mentioned earlier on

were not taken into cognizance.

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In their analysis Johnson and Scholes (1999:356) identify a number of ways, several of which

can be used to test the suitability or appropriateness of a strategy. These include, among others:

Life cycle analysis

The life cycle analysis assesses whether a strategy is likely to be appropriate given the stage of

the product life cycle. Some analyses combine this with the relative strength or weakness of the

organization in its market to produce a life cycle or portfolio matrix. The matrix consists of two

dimensions, namely, the market or industry situation and the competitive position. The purpose

of the matrix is to establish the appropriateness of particular strategies in relation to these two

dimensions. The crucial issue is establishing where an organization is currently positioned on the

matrix and therefore what types of strategies are most likely to be suitable. The competitive

position of the organization within its industry can take either of these forms: a dominant

position, which is a quasi-monopoly in the private sector and a legalized monopoly in the public

sector (e.g. public utilities like Eskom & Telkom). The second one is a favourable position where

no single competitor stands out, but the leaders are better placed. Finally, the organization attains

a tenable position which is maintained by focus or specialization. The fundamental question is

does the strategy fit the stage the organization will be in?

Positioning

This is a key test of suitability used to determine whether demand is likely to grow or decline.

The uniqueness of the competences, which underpin the value-added features of a product or

service, will determine the suitability of a positioning of differentiation. The extent to which an

organization is capable of supporting a particular positioning in its markets can be examined by

listing key resources and competences underpinning the strategy. These key resources are then

examined in terms of different bases of the product or market strategy. Finally, each of these

resources and competences is restricted to establish whether it is sustainable or difficult to

imitate. In other words, if it is a genuinely unique resource or core competence, it provides a

competitive advantage to the organization (Johnson & Scholes, 1999).

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The criteria used to judge a competitive advantage require an assessment of the extent to which

competences are valuable to buyers, rare (not easily obtained by competitors), complex (made up

of several organizational processes) and embedded in the tacit knowledge or routines. The major

question relating to this suitability test is: Is the positioning viable?

Value chain analysis

According to Dobson et al (2004) value chain analysis considers where and how the firm adds

value, namely, internal factors that drive profitability. The primary activities, that is, the main

value-adding activities, of the organization are grouped into five (5) main areas with each of

these areas linked with four supporting activities: procurement, technology development, human

resource management and firm infrastructure. In short, it describes the activities within and

around an organization and relates them to an analysis of the competitive strength of the

organization. The suitability of strategic developments may also be tested by the extent to which

the strategy will reconfigure the value for money and the competitive position of the

organization. The concept of synergy becomes critical in this connection as it is concerned with

assessing how much extra benefit (value for money) can be created from reconfiguring the

linkages in the value chain. Synergy can therefore be sought in several ways, which include,

market development, product development and backward integration.

Portfolio analysis

According to Johnson and Scholes (1999:362) portfolio analysis analyses the balance units. If the

original BCG matrix were used, the following questions could be asked: Will the strategy move

the company to a dominant position in its markets? Which strategies are most likely to ensure a

move from question marks through to stars and eventually to cash cows? Since question marks

and stars require an investment of funds, will there be sufficient cash cows to provide this

necessary investment? The matrix can also help in thinking about acquisition strategy. There

may be nothing wrong with acquiring a question mark provided the resources and competences

are there to move it towards stardom.

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Business profile analysis

It shows the extent to which a strategy matches the favourable performance parameters from

PIMS analyses. The important issue; however is that these drivers of profitability are

interconnected and building a strong business profile is more difficult than might appear. Any

strengthening of one parameter may weaken others and therefore not necessarily improve the

business profile overall. The interrelationships need to be taken into account when evaluating the

suitability of business strategies.

Figure 7: Testing suitability (Adapted from Johnson & Scholes 1999:356)

;.«• Life Cycle Analysis

Does it fit the stage the company will'be in?''"'''

Value Chain Analysis

•pDoes it inrojiSve'vatue !"""''' for money?1' • ' l|$es;,:it exploit core

^^Cornpetencies?^i,d ,: •]

Suitability

Is this a good ..stratigyfi';,:!:l

Portfolio Analysis

Does it stxehg^eh the balance of activities?

Positioning M;'

Is the positioning viable?

Business Profile {i I

Will!'il:|ead to good financial'p^ilpcmance? :|

• Screening options

Johnson & Scholes (1999:366) argue that screening is the process of comparing the

relative merits of different strategies. There are three contrasting approaches to the

screening of options, namely:

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Ranking

This involves the assessment of strategic options against key factors in the

environment, resources and stakeholder expectations. A score and ranking are

established for each option.

Decision trees

Options are ranked by progressively eliminating others.

Scenario planning

Here options are matched to different future scenarios and necessary contingency

plans are prepared.

During its strategic planning process, Mvula employed the scenario planning

approach to the screening of options. Various future scenarios were developed which

included the closure of some units within the organization and others centred on the

projection a positive future of the organization. Necessary contingency plans were

also developed. Some of such plans looked at possibilities of staff redeployment to

sustainable Regional Offices or units or to municipalities in order to strengthen the

working relationship. In the vent the organization had to shut down its operation in

future, a retrenchment strategy or plan was also considered. It was agreed that the

Last-In-First-Out (LIFO) principle would be used.

ii) Analyzing acceptability

According to Johnson and Scholes (1999), acceptability is concerned with the expected

performance outcomes such as risk or return, if a strategy is implemented. Simply put,

acceptability strategies can be assessed in three broad ways: return, risk and stakeholder

reaction. It is always advisable to use more than one approach or technique in building up a

picture of the acceptability of a particular strategy:

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• Return

An assessment of the returns likely to accrue from specific options is a key measure

of the acceptability of an option. Mentioned hereunder are different approaches to the

analysis of return:

Profitability analysis: Traditional financial analyses have been used extensively in

the evaluation of the acceptability of strategies.

Three of the more commonly used approaches are forecasting the return on capital

employed (ROCE), payback period and discounted cash flow (DCF) analysis.

Cost-benefit analysis (CBA): This tries to put a money value to all costs and benefits

of a strategic option including tangible and intangible returns to people and

organizations other than one sponsoring the project or strategy.

Shareholder value analysis (SVA): It is concerned with how corporate development

strategies are or are not generating shareholder value. Applying the shareholder value

analysis (SVA) within the strategic management process requires a new mindset

called value management. The latter emphasizes that discounted cash flow analysis

should concentrate on evaluating strategies at the strategic business unit (SBU) level

and not just separate investment projects. It is critical to identify the key cash

generators of the business, which are called the value drivers (Johnson and Scholes,

1999). Value management's big contribution is to emphasize how important

managing value-drivers is to making strategic decisions and in implementation and

control.

• Risk

Another measure of acceptability is the risk that the organization faces in pursuing a

particular strategy. Such risk can be particularly high for organizations with major

long-term programmes of innovation or where high levels of uncertainty exist about

key issues in the environment. Risk analysis entails:

Financial ratio projections: The projections of how key financial ratio would change

if a specific option were adopted can provide useful insights into risk.

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Sensitivity analysis: This is a useful technique for incorporating the risk during

strategy evaluation. It is sometimes referred to as what if? analysis.

Simulation modeling: Johnson and Scholes (1999:379) argue that strategic simulation

models attempt to encompass all the factors considered by the separate analysis

discussed in the foregoing account into one quantitative simulation model of the

company and its environment.

• Stakeholder reactions

Stakeholder mapping is a way of analyzing and prioritizing the political agenda for

an organization. These stakeholder maps are drawn only in relation to specific

strategic options. They are in fact a valuable tool in assessing the likely reactions of

stakeholders to new strategies, the ability to manage these reactions and hence the

acceptability of a strategy. Johnson and Scholes (1999:382) define stakeholder

mapping as a useful tool for encouraging managers to predict both the degree of

interest that stakeholders are likely to exhibit for or against a strategy and whether

they have the power to help or hinder the adoption of that strategy.

On the basis of the foregoing definition, it can be pointed out that during strategy

development Mvula engaged in an intensive exercise of predicting the likely

reactions of its stakeholders which included the Board of Trustees, the community,

DWAF and Local Government. It was envisaged that the Board would endorse the

new strategy which was based on the analysis of the operating environment the

organization found itself in. It was further thought that the community would still be

able to closely with Mvula despite the shift of its role from being an Implementing

Agent to a Project Agent the role that was previously outsourced to other NGOs,

Community Based Organizations (CBOs) and technical consultants in the past. These

two stakeholders showed no objection to the newly crafted strategy. In 2003 the

Board of Trustees ratified the new strategic plan which was implemented with

immediate effect and accepted by rural communities.

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With regards to DWAF, Mvula reckoned that DWAF would understand the rationale

behind this strategic change and would support Mvula in carving its new niche as an

ally or Service Support Agent (SSU) to local government. To the contrary, the KZN

DWAF Regional Office, for example, never came out clear in support of Mvula as a

credible water services delivery NGO in the province.

Although the Masibambane-NGO Programme of the Department stipulated that 25%

of the European Union (EU) funding had to be spent through the meaningful

involvement of Civil Society Organizations in the implementation of both water and

sanitation projects in all municipalities, DWAF did not want to prescribe to District

Municipalities as to how the EU requirement could be implemented. DWAF's

reaction was assumed to originate from the negative perception most municipalities

had about the past strategic relationship DWAF had with Mvula. It did not want to be

viewed as advocating and promoting Mvula as a preferred or sole credible NGO

within the water services sector that had the ability to support the service livery role

of municipalities.

Mvula management also thought re-branding the organization as a Project Agent

would somehow signal to municipalities that Mvula fully recognized their new role

as Implementing Agents. Another assumed reaction was that Mvula given its

previous track record within the sector it stood a better chance to be contracted

directly by municipalities that experienced a lack of expertise to deliver on their

constitutional mandate in terms of water services and policy development. The latter

was going to be a new competence to be built at Regional level. Most municipalities

were at first confused by Mvula's strategic shift which was never communicated to

them. Secondly, almost all municipalities had funding from national government that

was geared towards building and strengthening both capabilities and capacity of staff

within ISD, Technical and WSA Departments that would jointly perform the task of

water services delivery. Finally, some municipalities never liked Mvula's approach

of community involvement in all project management phases.

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They thought it was time-consuming and unnecessary. Hence preference was given

to consultants especially when it came to water projects. In conclusion it is worth

mentioning that Thompson (2001:532) refers to the acceptability criterion discussed

as desirability. He argues that the latter comprises:

Strategic needs or the planning gap: The ability of the strategy to produce results in

either the short term or the longer term should be assessed in the light of the needs

and priorities of the firm. Another important consideration is the ability of the crafted

strategy to satisfy the objectives of the organization and to help close any identified

planning gap.

The level of returns expected: Decisions concerning where a company's financial

resources should be allocated are known as investment or capital budgeting decision.

Competitive advantage and corporate strategic change are both relevant issues. The

ability to raise money and the cost involved are key influence that should be

considered alongside two other strategic issues: Does the proposed investment make

sense strategically given present objectives and strategies? Will the investment

provide an adequate financial return?

Synergy: Effective synergy should ideally lead to a superior concentration of

resources in relation to competitors. The prospects of synergy should be evaluated

alongside the applications for the firm's strategic perspective and culture. These

factors in combination affect the strategic fit of the proposal and its ability to

complement existing strategies and bring an all-round improvement to the

organization.

Stakeholder needs and preferences: This relates to the expectations and hopes of key

stakeholders, the ability of the organization to implement the strategy and achieve the

desired results and the willingness of stakeholders to accept the inherent risk in a

particular strategy.

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This highlights the importance of the power of influence of the strategic leader in the

choice of major strategic changes and his or her ability to convince other

stakeholders.

iii) Analyzing feasibility

Feasibility is concerned with whether an organization has the resources and competences to

deliver a strategy (Johnson and Scholes, 1999). A number of analytical approaches can be

used to assess feasibility. Some of them are mentioned below:

a Funds flow analysis

This valuable piece of analysis seeks to identify the funds that would be required for

any strategy and likely sources of those. Such an analysis should quickly highlight

whether the proposed strategy is likely to be feasible in financial terms.

• Break-even analysis

According to Johnson and Scholes (1999) break-even analysis is a simple and widely

used technique which is helpful in exploring some key aspects of feasibility. It can be

used to assess the feasibility of meeting targets of return or profit and as such,

combines a parallel assessment of acceptability. Break-even analysis can be a simple

way of quantifying some of the key factors that would determine the success or failure

of a strategy.

• Resource development analysis

While it is necessary to assess feasibility in financial terms, it is also useful to make a

wider assessment of the resources and competences of the organization in relation to

specific strategies. This is called a resources development analysis. The requirements

of alternative future strategies are identified and matched with the key resources and

competencies for each strategy. Resource development analysis can assist in

determining whether the organization should stay in the business and compete

successfully.

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Some important questions to employ when assessing this feasibility:

• Does the organization lack necessary resources?

• Is it currently performing below threshold on any activity?

• Which unique resources already exist?

• Which core competences already exist?

• Could better performance create a core competence?

• What new resources or activities could be unique or core

competences?

Thompson (2001:533) identifies five important issues the feasibility analysis should

concentrate on:

Change demands- issues of implementation: Is the strategy feasible in resource terms? Can

it be implemented effectively? Is it capable of achieving the objectives that it addresses? Can

the organization copy with the extent and challenge of the change implied by the option?

Finance and other resource availability: This is very important since a lack of any key

resource can place a constraint a certain possible development.

The ability to meet key success factors: No strategic alternate is feasible if the key success

factors dictated by the industry and customer demand, such as quality, price and service

level cannot be met.

Competitive advantage: The effectiveness of a strategy will be influenced by the ability of

the organization to create and sustain competitive advantage. When formulating a strategy, it

is important to consider the response of existing competitors in order to ensure that the

necessary flexibility is incorporated into the implementation plans.

Timing: This is related to the opportunity on the one hand and risk of the organization to

create and sustain competitive advantage. It may be important for an organization to act

quickly and decisively once an opening window of opportunity is spotted. Managers should

make sure that they allow themselves enough time to consider the implications of their

actions and organize their resources properly.

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3.4 Concluding summary

This chapter has presented various definitions of strategic management which all point to

the development of an integrated plan that enables an organization to compete successfully

in its operating environment and industry. It further described in a more comprehensive

manner a five-stage model of strategic management which has been adopted in this study.

This model was preferred to other approaches discussed in the study because of its

comprehensive and rigorous nature. The adopted model looked at the theoretical strategic

management framework Mvula had to follow in developing the strategy discussed in detail

in Chapter 2.

The comparison between Mvula's approach and this model reveals three manifest

shortcomings. Firstly, Mvula never developed a strategic vision or strategic intent which is

a roadmap of an organization's future that reflects management's aspirations for the

organization and its business and thus provides a panoramic view of where it is going. This

means that Mvula as an organization lacked a statement that could chart a strategic path or

direction for it to follow. Ordinarily, developing a vision statement is considered the first

step in strategic planning. Secondly, the organization has not embarked on strategy

evaluation so as to initiate needed corrective actions that could have averted the downsizing

and rightsizing processes that have already occurred within Mvula and the Empangeni

Regional Office in particular. This was looked at as part of the three main criteria employed

universally in evaluating organizational strategy, namely; suitability, acceptability and

feasibility. Thirdly, Mvula's major shortcoming during its strategic planning was the

complete exclusion of its strategic partners and stakeholders that ranged from the rural

community to municipalities.

To achieve the objective analysis of its capabilities, challenges and operating environment,

Mvula was supposed to invite DWAF, sampled municipalities and community

representatives to actively participate in its strategic planning process. The result could have

been the crafting of an objective and viable strategy which could effectively respond to the

support needs of municipalities in terms of water services provision.

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The next chapter presents the methodology that will be employed when conducting

research. This will involve a full description of the research design, the sampling procedure

and methods employed for data collection, namely, the research instrument.

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CHAPTER FOUR

RESEARCH METHODOLOGY

4.1 Introduction

The process involved in strategic planning and strategy evaluation was presented in the

previous chapter. This chapter discusses the methodology that will be employed when

conducting research in the identified District Municipalities. This will involve a full

description of the research design, the sampling procedure and methods employed for data

collection. The research methodology chosen for the purpose of this study is aimed at

evaluating the suitability of Mvula's existing strategic plan. It is therefore imperative that a

chosen research methodology is scientifically correct, relevant and replicable since it has to

ensure the reliability and validity of the research results.

4.2 Research design

Mouton & Marais (1991:33) state that the aim of a research design is to plan and structure a

given research project in such a manner that the eventual validity of the research findings is

maximized. A research design is, according to Kerlinger (in Kumar, 2005), "a plan, structure

and strategy of investigation so conceived as to obtain answers to research questions or

problems. The plan is the complete scheme or program of the research. It includes an outline

of what the investigator will do from writing the hypotheses and their operational

implications to the final analysis of data". As Kumar (2005:84) postulates the researcher,

through a research design, conceptualizes an operational plan to undertake various

procedures and tasks required to complete the study. Secondly, the design ensures that these

procedures are adequate to obtain valid, objective and accurate answers to the research

questions.

In line with the foregoing postulation this study employs a qualitative or exploratory

approach to evaluate whether Mvula's crafted strategy is able to support the water service

delivery role of Uthungulu, Umkhanyakude and Zululand District Municipalities.

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The qualitative or exploratory study approach is, according to Mouton & Marais (1991),

more preferred because it will enable the researcher:

• To gain new insights into the phenomenon under investigation.

• To follow an open and flexible research strategy.

• To conduct a review of secondary data and literature pertinent to the research topic.

• To conduct a survey of people who have had practical experience of the problem to

be studied.

• To use methods such as literature reviews, interviews, case studies and informants,

that may lead to insight and comprehension.

In broad terms, it can be stated that there are two factors that impact on the chosen research

design: these are of an academic and applied nature. On the one hand, the academic factor

suggests that the research is geared towards exploring things for their own sake without any

regard for their own applicability. Its fundamental purpose is to provide the student with

experience to find knowledge that is useful to the real world. Secondly, this study will also

take the form of applied research since it purports to provide a solution to the organizational

problem. It will do this by presuming that some kind of knowledge regarding Mvula strategic

plan has been revealed and it needs further refinement and explanation. During the

implementation stage, the level of confidence will be heightened by the fact that the research

will have identified gaps or shortcomings and suggested remedial action. The major pitfall

the researcher will endeavour to avoid is allowing preconceived ideas to exercise a

determining influence on the direction or nature of the research. Two of the exploratory

techniques to be employed include:

4.2.1 Secondary data analysis

According to Cooper and Schindler (2003) the first step in an exploratory study is to

analyze secondary data. This involves a search of the secondary literature, which is

usually in the form of studies made by others for their own purposes. Within

secondary data exploration, the researcher will start first with the organization's own

data archives.

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Prior research studies were reviewed in order to identify research methodologies that

proved either successful or unsuccessful. In line with this guideline, for the purpose

of this study, a few relevant documents have been developed during Mvula strategic

planning process. These entail such documents obtained from Mvula as the Strategic

Plan, the Blue Chip document designed to dissect the organization in its current form

and the "CSO/NGO procurement by the KZN Water Services Authority" document.

The organization's data archives were explored so as to reveal an extensive amount of

historical and current data. This helped in the identification of methodologies used,

and gaps in the strategic plan. Authors outside Mvula prepared the last two

documents mentioned above as a valuable second source of secondary data. Hence

they hold an objective view or perspective on the organization. These documents are

current and take cognizance of the new role of local government, which creates a new

dispensation for the organization.

Experience survey

In the light of the shortcomings associated with archived data, it has been imperative

for the researcher to seek information from persons experienced in the area of study,

tapping into their collective memories and their experience. This has therefore

constituted primary data from primary sources providing first-hand data. Municipal

officials from relevant service delivery Units, namely Technical, Waters Services

authority (WSA) and Institutional & Social Development (ISD) have been

approached in order to seek ideas about important issues or aspects of the subject and

to discover what was important across the research topic's range of knowledge. The

investigative format used was flexible to facilitate the exploration of various avenues

that emerged during questionnaire administration. It should also be noted that this

sample of Mvula clients was chosen to elicit insightful information.

In order to implement the foregoing techniques, the following methods were

employed:

• Literature survey or review

• A structured questionnaire was administered to existing clients of Mvula.

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• Gap Analysis was another useful technique used in this study. This technique

moves from the premise that there is a gap, which management need to

close, manage the process of change and finally monitor the process to

ensure that the same gap does not reappear and, if possible, to open a

favourable gap with the competition. A simple, but very powerful, approach

to gap analysis centres around three questions, that will help close the gap

between the existing strategy and the refined one (Ambrosini 1998:221):

Where are we now? Where do we want to get to? How can we get there? A

model of gap analysis can be portrayed pictorially as shown below:

Figure 8: Gap analysis (Adapted from Ambrosini 1998:221)

Recognize there is a gap

Develop strategies to close the gap

Manage the process of change

Monitor and widen the advantage over competitors

Performance gap analysis is also useful in assessing the existent strategic by allowing the

application of other strategic planning techniques such as PEST, SWOT and culture web with a

purpose and direction. A similar approach was followed by Mvula during its strategic planning

process. The details of performance gap analysis were given in Chapter 2 which looked at

Mvula's situation prior to the development of its current strategic plan, where it wanted to get to

and how it would get there. A simple performance gap analysis can be illustrated as follows:

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Performance Gap Analysis (Adapted from Ambrosini 1998:221)

Objective

Where do we

want to get to?

Gap

How do we get

there?

Forecast

Where are we now?

Time

4.3 Sampling procedure

Coldwell & Herbst (2004:74) define sampling as the act, process or technique of selecting a

representative part of a population for the purpose of determining parameters or

characteristics of the whole population. Melville and Goddard (1996:30) state that samples

must be representative of the population of concern; otherwise no general observations about

the population can be made from studying the sample. The population in this regard is all

municipalities in KwaZulu-Natal which have the Water Services Authority status. In order

to avoid a sample bias, namely, the over- or under-representation of particular subgroups of

the population, the researcher set out to involve all staff within water services delivery units,

these being Technical, WSA and ISD, in three northern KwaZulu-Natal District

Municipalities. This was possible given the size of the target population. Since the study

focus was on Umkhanyakude, Uthungulu and Zululand District Municipalities with the total

number of thirty-five (35) employees within the said units, an effort was made to obtain

informed consent from all of them. Only thirty (30) showed the willingness and thus agreed

to participate in the study.

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Hence stratified random sampling procedure was used to ensure that appropriate numbers

were selected from each group (stratum) so that the overall sample reflects each group in the

known proportions. Another reason for this choice of procedure over simple random

sampling was that members within each stratum were fairly similar (homogeneous) whereas

there were marked differences between members of one group and those of another. The

differences were was mainly due to the fact respondents were from different District

Municipalities. Homogeneity existed in that all respondents operated within local

government environment with the same constitutional mandate; functions of each unit were

the same across municipalities except for insignificant variations and they all had Mvula as

their Implementing Agent.

4.4 Data collection methods

Two approaches were employed to gather data about the situation under investigation. One

approach was to gather secondary data since some of the information that was required for

the study was already available and only needed to be extracted (Kumar, 2005). Such

secondary data was obtained from secondary documents such as the organization's Strategic

Plan (2003 - 2008), Mvula's Blue-chip NGO Document, earlier research undertaken, the

KwaZulu-Natal CSO/NGO Facilitation Meeting document and other Mvula records and

documents developed by DWAF.

The second approach entailed collecting data using a primary source, the questionnaire, in

order to find out the perceptions of municipal officials on Mvula's ability to support water

services delivery at local government level. The total number of questionnaires administered

for the purpose of this study was thirty (30).

In accordance with Lancaster (2005:138) the key aspects of questionnaire design and

implementation considered by the researcher included, among others:

• The range and scope of questions

a Question types, for example, open or closed

• Content of individual questions

• Question Structure

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• Question wording

• Question order

• Method of administering the questionnaire, either face to face or non personal

• Methods of returning questionnaires, for example, mail or computer-based, and

• Methods of recording responses.

In this study questions to respondents were structured in such a way that the questionnaire

contained both closed and open questions. The latter questions were included so as to capture

responses that otherwise could not have been obtained through closed ones. The simple

wording of questions allowed respondents not to spend time trying to understand the question

but to rather focus on the content of the response. Although all questionnaires were hand-

delivered, no questionnaire was administered face to face. Most questionnaires were

collected from respondents whereas a few of them were returned by facsimile. All returned

questionnaires were captured and coded using the software called Microsoft Access and

subsequently imported into an analytical tool called stata.

Although there were a number of data collection methods that could have been employed for

the purpose of the study, the questionnaire (Appendix 4) was chosen, over interviewing and

observation, as the most practical research instrument.

Reasons for such preference are mentioned hereunder:

• The nature of the investigation. Since the study was about the evaluation of the

performance of the organization the researcher was previously working for, some

respondents might become reluctant to discuss their perceptions or views with the

researcher. The questionnaire was the best choice as it ensures anonymity.

• The geographical distribution of the study population. Potential respondents were

scattered over a wide geographical area, namely, three wall to wall District

Municipalities which are virtually 300 km apart. The use of a questionnaire was

comparatively convenient and inexpensive. Since this was a non-funded research

project, it was more than necessary to keep the cost of the research to a minimum.

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• The type of study population. The entire population was literate hence a self-

administered questionnaire was a feasible option. Each research questionnaire was

accompanied by a covering letter (Appendix 2) and the informed consent form

(Appendix 3). Although self-administered, the questionnaires were either faxed back

or collected by the researcher.

The questionnaires were administered to thirty (30) officials of the three northern KZN

District Municipalities, namely, Umkhanyakude (DC 27) Uthungulu (DC 28) & Zululand

(DC 26). They were hand-delivered by the researcher to all willing respondents together with

the detailed covering letter. Out of thirty questionnaires that were administered only twenty-

five were returned.

4.5 Data analysis

Three key steps as espoused by Lancaster (2005:170) were followed during the process of

data analysis. The first step was data reduction, which is the process of selecting, focusing,

simplifying, abstracting and transforming qualitative data and organizing the data into clear

patterns. These patterns best summarized the data and enabled preliminary findings to begin

to be determined. This was facilitated through the capturing and coding of all received

questionnaires using the software called Microsoft Access.

The very process of selecting and identifying chunks of data into patterns inevitably meant

that the researcher's own often subjective viewpoints and ideas shaped and determined the

data reduction process. Data was further coded in order to render it in a form which can be

presented and analyzed with ease. Finally, data was imported into a social sciences analytical

software package called stata which is a fast and powerful statistical package for research

professionals of all disciplines, from biostatisticians to political scientists. Stata is a complete

statistical, graphical and data-management package with a broad suite of statistical and data-

management capabilities. As such it provides commands for analyzing and supports byte,

integer, float, double, long and string variables. It further supports research in many fields,

including pharmaceutics and epidemiology and has an integrated matrix programming

language.

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Lancaster (2005:171) state that the second step in analyzing qualitative data is called data

display. During data analysis this step involved the presentation of qualitative data in ways

which enable others to assess, interpret and evaluate the interpretations and conclusions

drawn by the researcher. The data collected using questionnaires was then captured into

Microsoft Access and subsequently imported into an analytical software package. The

emphasis was on ensuring validity and reliability of data and research undertaken. Data could

then be presented in a number of techniques such as graphs and charts. Both data reduction

and display enabled the researcher to look for common threads or trends in response patterns.

These similar patterns could then be cut apart and matched among three groups, namely,

ISD, Technical & WSA, and among all three municipalities, Umkhanyakude (DC 27)

Uthungulu (DC 28) & Zululand (DC 26).

The third step entailed drawing and verifying definitive conclusions from the data. It is true

that some conclusions began to emerge during the previous stages. Final conclusions,

however, evolved from the complete analysis of the qualitative data after data reduction and

data display. As further reckoned by Lancaster (2005:171), throughout the process of

analysis, initial and tentative conclusions began to firm up and to be verified as the analysis

proceeded. This process was also carried out such that conclusions should be open to others

to evaluate, again lending validity and reliability to the data and research findings. Cross-

tabulation of variables on the questionnaire also confirmed the patterns and conclusions that

had begun to emerge.

4.6 Concluding summary

This chapter has described the entire research methodology used for the purpose of this

study. It did that by giving an account of the research design, sampling methods or

procedures, data collection methods employed during the study. It further looked at the data

analytical tool to be used during the analysis as well as three key stages in qualitative data

analysis. The analyzed research findings from twenty-five respondents are presented in

Chapter Five.

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CHAPTER FIVE

PRESENTATION OF FINDINGS

5.1 Introduction

This chapter presents data from research conducted at Umkhanyakude, Uthungulu and

Zululand District Municipalities. As outlined in Chapter One, Mvula's daunting challenge

was to prove its rationale for existence as a necessary intermediary or delivery arm for water

services supporting municipalities. The establishment of Local Government which

previously never had a constitutional mandate to deliver water services was perceived as one

most important element of transition in the country. Despite that the development of viable

and effective developmental local government which meets the needs and expectations of its

constituency continued to be a challenge for National Government as well. In order to

survive those major changes in its operational environment and to respond to those new

challenges, Mvula had to carve its new niche in the water sector by positioning itself as a

strategic ally for municipalities in the delivery of water services. It therefore became

imperative for Mvula to embark on a strategic planning exercise. This process was an

endeavour to better prepare itself for the future so that it could remain relevant and

indispensable within the water sector. As to whether Mvula's newly crafted strategy has

been able to support the water services delivery role of developmental local government

with special reference to three northern KwaZulu-Natal municipalities is thus the issue at

hand in this research study.

The purpose of this research study was to conduct a rigorous evaluation of Mvula's Strategic

Business Plan (SBP) developed in 2003 to support the water services delivery role of

developmental local government. To that end, the total sample size was thirty-five (35),

which comprised employees within ISD, Technical and ISD units. Informed consent to

participate in the study was obtained from only thirty (30) participants. In the final analysis

only twenty-five (25) accurately completed questionnaires were returned, equating to a

resultant response rate of 83.3%. The respondent group across all three municipalities was

described in terms of two demographic variables; age and gender.

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The demographic profile showed that 72% of all respondents were males and 28% were

females. The age distribution was such that 44% were between 26-35 years, 40% were

between 36-45 years, and 16% were between 46-55 years. Other variables used in the study,

related to each respondent's municipality, department and period of service. 48% of the

respondents came from Umkhanyakude, whereas 20% and 32% were from Uthungulu and

Zululand respectively. The Technical department had 64% of respondents, whilst ISD and

WSA had 20% and 16%) each. 76% of respondents had worked for any of the three

municipalities for 1-4 years and 24% had worked for 5-9 years which includes the period of

service under Regional Councils which were later transformed into district municipalities in

2000. Empirical findings on how municipal employees within the designated departments

evaluated Mvula's strategy and performance are presented in terms of sixteen questions

contained in the questionnaire administered to all three municipalities:

5.2 Empirical findings

5.2.1 Capacity in which respondents knew Mvula

The research found that a substantial number (72%) of respondents only knew Mvula as a

sanitation development organization. Only 20%> regarded Mvula as an Implementing

Agent (IA) for both water and sanitation development. The remaining 8% perceived

Mvula as an Institutional & Social Development (ISD) organization focusing on social

facilitation.

Figure 10: Number of respondents knowing Mvula in different capacities

8%

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2 Services provided by Mvula to district municipalities

Findings suggest that 64% of respondents, the majority from Zululand Municipality,

indicated that Mvula provides sanitation development services to their municipalities.

The second category comprising 20% mentioned Mvula as an IA responsible for both

water and sanitation development. Mvula is known to provide ISD services by 12% of

the respondent group. Only 4% were unsure of services the organization provides to the

respective municipality.

Figure 11: Services provided by Mvula to district municipalities

3 Knowledge of Mvula's mission and vision

The majority (68%) of those who responded did not know both the mission and vision of

the organization. Only 32% of them could vaguely state the mission statement only.

Figure 12: Number of respondents knowing Mvula's mission and vision

El Don't know • Vaguely know

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4 Knowledge of Mvula Strategic Plan: 2003 - 2008 document

All respondents (100%) reported that they had never read nor seen the Strategic Plan of

Mvula which was created to enhance its ability to support water services delivery at

municipal level.

5 Involvement in the Strategic Plan development process

The findings suggest that 100%) of respondents were never involved in Mvula's strategic

planning process.

6 Consultation for input during and after the strategic planning process

All respondents (100%) indicated that they were never consulted for input during and

after the development of Mvula's strategic plan.

7 Comment on Mvula's preferred service provider status

According to the study, 52%> of respondents did not regard Mvula as a preferred service

provider and 44%> still preferred Mvula. Only 4%> of respondents were unsure regarding

this question. The preference was mainly in terms of sanitation development as some

respondents stated that most water projects previously implemented by Mvula were not

successful.

Figure 13: Comment on preferred service provider

60

50- I

_ 40 ; ; •• ' J 1

130 - y

°- 20 ' - S\

Other Mvula Unsure

Prefered service provider

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8 Any water projects implemented by Mvula within municipalities

The study shows that 52% stated that Mvula was implementing some water projects in

their areas whereas 40% indicated there were no such projects in their jurisdictional

areas. Only 8% mentioned that Mvula implemented some water projects in the past, not

during the time of conducting the study.

Figure 14: Implementation of water projects according to respondents

60

50 -

40

I 30

" 2 0

10

0

In

%

nplementin 9 No Implemen ing

SI In the past

9 Any sanitation projects implemented by Mvula within municipalities

Most respondents (92%) agreed that Mvula was appointed for sanitation implementation

within their municipalities. Only 8% stated that Mvula was not implementing any

sanitation projects in their areas.

Figure 15: Implementation of sanitation projects according to respondents

8%

92%

• Implementing sanitation • Not implementing

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5.2.10 Increase or decrease in projects allocated to Mvula

The research findings depict that 56%) of respondents stated that the number of both water

and sanitation projects allocated by municipalities to Mvula has decreased in recent

years. The increase of such allocation was only mentioned by 24% of respondents. Only

20%) were not sure whether there had been an increase or decrease.

Figure 16: Size of respondents versus status of projects allocated to Mvula

• Decreased • Increased • Unsure

5.2.11 Factors that contributed to either increase or decrease in Mvula projects

A majority of respondents (80%) attributed the decrease in the number of projects

allocated to Mvula to the lack of project management capacity or expertise within the

organization. Other factors included in this question related to poor work quality and lack

of professionalism among employees. Hence Mvula was perceived as adding an

unnecessary burden to municipalities instead of providing the necessary impetus in terms

of water services delivery role. Only 20%> cited funding delays as the main reason for the

decrease in Mvula projects. None of the respondents could cite factors that could have

potentially contributed to the increase of projects.

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Figure 17: Factors shown according to the number of respondents

90%

80%

70%

60%

50%

40%

30%

20% -<

10%

0%

IliSESiEii

•Bill ' -iB i i i is i i i "'•• '•--

•111 •"•• -':"

Lack of expertise Lack of funding

5.2.12 Recommendation that current Mvula strategy be revised or strengthened

According to study findings 88% of respondents recommended that the adopted strategy

should be revised and Mvula should engage in broader consultation in order to craft a

viable strategy. There were only 12% of those who did not recommend anything because

they had never read nor seen Mvula's strategic plan before.

Figure 18: Number of those who recommended revision of strategy

12%

88%

Recommended revision El Neutral

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5.2.13 Aspects of the current Mvula strategy to be revised or strengthened

Most respondents (84%) pointed out that Mvula should involve or consult its clients

during strategy formulation. This would lead to a better understanding of client needs that

should form the basis for a new strategic direction. Poor articulation of Mvula's niche

within the sector was viewed as another aspect that needed to be looked into. They

further recommended that the strategy thus developed should be communicated broadly

to all Mvula clients. Finally, it was stated that Mvula should increase in-house technical

capacity and avoid desktop project planning process. Only 16% of respondents decided

not to point out any specific aspects of the strategy needing revision or strengthening.

5.2.14 Mvula's success rate in supporting municipal water services delivery role

The study shows that 96% of municipal officials stated that Mvula took too long to

complete both water and sanitation projects. Most of the completed projects left much to

be desired in terms of quality and sustainability. Mvula's perceived success was only in

terms of institutional and social development training. In general, Mvula was perceived

as failing to proactively market and support local government. Its approach was mainly

reactive. There were only 4% of respondents who vaguely commented on Mvula's

success rate in this regard. Some mentioned that the organization only succeeded in

respect of the quantity, not quality, of projects under its implementation portfolio in the

old dispensation, namely, the DWAF era.

Figure 19: Number of respondents who rated Mvula's performance

96%

• failed • Unsure

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5.2.15 Water services delivery support needed by municipalities

In view of this study 84% of respondents reported that in order to meet the 2014 target,

district municipalities needed ISD support since they had enough technical capacity to

speed up water services delivery. They argued that civil society organizations like Mvula

and other sector NGOs had vast experience in the area of community mobilization,

community awareness, social facilitation and training.

The delayed and uncertain transfer of funding from the Municipal Infrastructure Grant

(MIG) was identified by only 12% of respondents as a major constraint that hindered the

adequate provision of basic water services within municipal areas. Only 4% identified

studies on impact assessment and transformation issues as strategic support needed by

local government.

Figure 20: Water services support needs as per the number of respondents

90%

80%

70%

60% J

50%

40%

30% !

20% j

10%

0%

ISD support Funding Impact studies

5.2.16 General comments about Mvula's role in supporting water services delivery

Although almost all respondents appreciated Mvula's past contribution in the sector,

mainly in terms of policy development, 92 % stated that since the newly crafted strategy

was not known, it could not be supported by local government.

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They further stated that Mvula should realign itself with changes taking place within the

water sector and local government sphere in general. They also mentioned that Mvula

should strive to meet and even surpass client expectations. Some even pointed out that

Mvula was in fact on the verge of working itself out of the job or dying its natural death

whilst there were immense opportunities for its continued existence as an NGO in the

new dispensation. Only 8% of respondents did not make any general comments.

5.3 Concluding summary

This chapter has presented research findings from twenty five questionnaires that were

administered to officials working within Technical, ISD and WSA departments of

Umkhanyakude, Uthungulu and Zululand District Municipalities. The results analyzed by

means of an analytical tool called stata were presented in a narrative format as well as in

graphical representation which included bar graphs and pie charts. Research findings were

extrapolated from the data presented by respondents under each of the sixteen questions

contained in the research instrument.

The next chapter presents both the conclusions and recommendations emanating from the

foregoing research findings and the in-depth literature review conducted in Chapter 3 of

this study.

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CHAPTER SIX

CONCLUSIONS AND RECOMMENDATIONS

6.1 Introduction

A detailed account of research results obtained from structured questionnaires administered

to municipal officials was presented in the previous chapter. The primary aims of the study

were outlined in Chapter One as mentioned hereunder:

• To conduct a rigorous evaluation of Mvula's Strategic Business Plan (SBP)

developed in 2003 to support the water services delivery role of developmental local

government.

• To establish how the developed strategy supports the organization's emerging

mission, which is to improve the health and livelihoods of poor and disadvantaged

South Africans in rural and peri-urban communities through facilitating delivery of

integrated and sustainable water, sanitation and related services.

• To examine the extent to which the crafted five-year strategy has supported three

northern KwaZulu-Natal District Municipalities of Uthungulu, Umkhanyakude and

Zululand to deliver water services to their respective communities in a more efficient,

cost-effective and sustainable manner.

a To subject Mvula's strategic plan to contemporary strategic planning processes.

The foregoing broad research aims together with the following research questions guided the

whole research process:

• Has Mvula's strategy been crafted in line with contemporary strategic planning

processes?

• Is Mvula delivering on the services requirements of Local Government particularly

in the municipalities of Uthungulu, Umkhanyakude and Zululand?

a Does the existing strategy of Mvula enable Local Government to meet its service

delivery mandate?

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Chapter Two presented a detailed review of Mvula case study. Such a review entailed the

historical background of Mvula, its services, its geographic spread as well as its customer

base. It further involved a closer scrutiny of changes in Mvula's work context and portfolio,

changes in the funding environment and the adopted survival strategy. This background

information was important in understanding Mvula's evolutionary trend and in establishing

major and inevitable changes in Mvula's operating environment that led to the strategic shift.

The theoretical framework for strategic planning and evaluation was discussed in Chapter

Three. This chapter also described in detail the rigour strategic planning from a diversity of

perspectives. It also pulled together the strands of the "what" element of the chosen strategy

is evaluated to gauge its correctness and effectiveness. The reviewed literature was evaluated

against what Mvula had done during its strategic planning process.

The research methodology was presented in Chapter Four and it involved a detailed account

of the research design, the sampling procedure and methods employed for data collection,

namely, the research instrument. It further described the data analysis process which was

undertaken by means of a specific statistical tool used called stata. In Chapter Five, research

findings obtained from the questionnaires administered to the officials of three northern

KwaZulu-Natal District Municipalities were discussed and also presented using bar graphs

and charts.

Besides pointing out weaknesses while reinforcing positive aspects or strengths of Mvula's

crafted strategy, this Chapter discusses research findings and draws some conclusions.

Finally, it will make recommendations that will enable Mvula to realign its strategy with

local government imperatives and practical support needs in terms of water services delivery.

6.2 Addressing demographic profile

The research results showed that the largest component within the three District

Municipalities involved in the study was the Technical Department. This was followed by

the Institutional and Social Development Department (ISD).

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It appears that the major thrust of all municipalities is on project implementation as opposed

to operating and maintaining existing projects. While municipalities need technical support

during implementation, it can however be concluded that municipalities have successfully

beefed up their technical capacity in terms project monitoring as Implementing Agents

(IAs). The evident need is in respect of hands-on project implementation as Project Agents

(PAs). The staff capacity levels within ISD Departments also reveal that municipalities also

need support with regards to institutional and social development support. From this it may

be concluded that these are the two niche areas and competencies Mvula should have

concentrated on or carved itself. In view of their past involvement in community

mobilization and awareness campaigns, Civil Society Organizations (CSOs) are perceived to

be competent in dealing with issues relating to social facilitation.

6.3 Addressing the first research question

As mentioned earlier on, this research study was guided by three important research

questions. The first one is: Has Mvula's strategy been crafted in line with contemporary

strategic planning processes?

The sequential approach followed by Mvula during its strategic planning process entailed

strategic analysis as its first step. This involved the examination and analysis of the

organization, its mission and objectives. Mvula senior management and some Trustees

conducted an examination of the objectives and the organization's relationship with its

environment. Coupled with that was the analysis of the organization's resources. The second

step, strategy development, enabled the development of various strategy options. The chosen

strategy proposed the strengthening of all operations within Mvula to render it an efficient

strong and viable NGO that has the ability to develop close relationships with its new client,

namely, local government while strengthening its existing relationship with DWAF. Mvula

Management and the Board of Trustees thought that this strategy option would provide the

organization with advantages over its competitors that would be sustainable over time. The

final step, strategy implementation, was faced with major difficulties in terms of motivation,

regional or provincial dynamics, and realignment of operations between Head Office and

Regional Offices, and Local Government negotiations.

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Sadly, Mvula did not have a dedicated change agent or champion or driver of the major

strategic changes that had to be implemented over time. Consequently, the organization had

to retrench or not to replace some of its staff that resigned at both Head Office and Regional

levels. The Empangeni Region was no exception. The most drastic action that was taken

involved the closure of the Ulundi Satellite Office (under Empangeni Region) and some

Regional offices such as Mpumalanga, Kokstad and Umthatha. On the basis of the foregoing

account, it can be concluded that Mvula's crafted strategy has not enabled the organization

to carve its new niche in supporting the service delivery role of local government in many

aspects let alone sustaining the operational efficiency levels that existed prior to the strategic

planning process.

In this study five interrelated managerial tasks of the strategy formulation process espoused

by Thompson and Strickland (2003:6) was used and adopted as a contemporary model for

strategic planning. These steps entail:

• Developing a strategic vision & business mission

• Setting objectives

• Crafting a strategy to achieve the objective

• Implementing and executing strategy

• Evaluating performance, monitoring new development and initiating corrective action

This model was preferred and thus adopted instead of other approaches because of its

comprehensive and rigorous nature. This is the model Mvula should have followed during

its strategic planning process. Hence the comparison between Mvula's approach discussed

in detail in Chapter Two and this model reveals three evident shortcomings.

Firstly, Mvula never developed a strategic vision or strategic intent which is a roadmap of an

organization's future that reflects management's aspirations for the organization and its

business and thus provides a panoramic view of where it is going.

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This means that Mvula as an organization lacked a statement that could chart a strategic path

or direction for it to follow. Ordinarily, developing a vision statement is considered the first

step in strategic planning. Secondly, the organization has not embarked on strategy

evaluation to initiate needed corrective actions that could have averted the downsizing and

rightsizing processes that occurred within Mvula and the Empangeni Regional Office in

particular. This was examined in Chapter Three as part of the three main criteria employed

universally in evaluating organizational strategy, namely, suitability, acceptability and

feasibility. Thirdly, Mvula's major shortcoming during its strategic planning was the

complete exclusion of its strategic partners and stakeholders ranging from the rural

community to municipalities. These manifest shortcomings warrant a need for strategic

review if Mvula intends crafting a winning strategy that would better position the

organization for the provision of water support services required by local government.

6.4 Addressing the second research question

The second research question this study had to answer is: Is Mvula delivering on the

services requirements of Local Government particularly in the municipalities of Uthungulu,

Umkhanyakude and Zululand?

The study conducted revealed that 84% of respondents reported that their District

Municipalities need ISD support since they had enough technical capacity to speed up water

services delivery. Their argument was that Civil Society Organizations like Mvula and other

sector NGOs had vast experience in the area of community mobilization, community

awareness, social facilitation and training. Only 4% identified studies on impact assessment

and transformation issues as strategic support needed by local government while 12% of

respondents cited delayed and uncertain transfer of funding from the Municipal

Infrastructure Grant (MIG) as a major constraint that hindered the adequate provision of

basic water services within municipal areas. This was the analysis of a collective response

given to Question 15 of the questionnaire which asked: What service delivery vehicle or

strategic support does your District Municipality need to effectively deal with its current

water services backlog and thus meet its 2015 target?

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From this it can be concluded that municipalities experience serious deficiencies in terms of

ISD skills and the majority are not keen to develop in-house capacity and capability in this

regard. From Question 2: What services does the Mvula Trust provide in general and to your

District Municipality in particular? The research study found that 64% of respondents, the

majority of them were from Zululand Municipality, pointed out that Mvula provide

sanitation development services to their municipalities. The second category comprising

20% mentioned Mvula as an IA responsible for both water and sanitation development.

Mvula is known to provide ISD services by 12% of the respondent group. Only 4% were

unsure of services the organization provides to the respective municipality. It can therefore

be inferred that Mvula no longer has a role as an IA in the water services sector since

District Municipalities are, by default, having an IA status. Secondly, this status was

associated with a financial reward in the form of IA fees. Instead of being as a competitor to

municipalities, Mvula should rather develop technical skills or capabilities as Project Agent

for sanitation projects. Sanitation work if well managed and cost-effectively executed can

serve as the organization's mainstay and cash-cow.

Another new area Mvula can explore with no fear of fierce competition entails conducting

impact assessment studies on development programmes implemented by local government.

Most municipalities need support in integrated development planning as well as in assessing

the impact of implemented projects in terms of job creation, changing people's quality of

life and livelihoods and poverty alleviation. In the light of its vast experience and

understanding of communities where it operates, Mvula may potentially develop this

capability as the lead NGO.

6.5 Addressing the third research question

The final research question guided the study in establishing whether Mvula's strategy has

been able to support the water services delivery role of developmental local government in

northern KwaZulu-Natal. This question was: Does the existing strategy of Mvula enable

Local Government to meet its service delivery mandate? Question 14 asked: In general, do

you think the Mvula Trust has succeeded in supporting the water services delivery role of

your District Municipality? Why do you answer so?

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The response given to this question showed that the majority of municipal officials were

dissatisfied with Mvula's performance since they took too long to complete both water and

sanitation projects. Secondly most of the completed projects left much to be desired in terms

of quality and sustainability. They further stated that Mvula's perceived success was only in

terms of institutional and social development training. In general, Mvula was perceived by

most officials as having failed to proactively market and to support local government. Its

approach was seen to be mainly reactive. Some mentioned that the organization only

succeeded in respect of the quantity, not quality, of projects under its implementation

portfolio in the old dispensation, namely, the DWAF contract. From this it can be concluded

that Mvula has not succeeded in supporting the water services delivery role of Northern

KwaZulu-Natal District Municipalities.

It is worth mentioning that almost all respondents appreciated Mvula's past contribution in

the sector which mainly in terms of policy development. They stated that since the newly

crafted strategy was not known, it could thus not be supported by their municipalities. From

that premise it is vital that Mvula realign itself with changes taking place within the water

sector and local government sphere in general. Mvula should strive to meet and even surpass

client expectations. The urgency of this strategic shift was highlighted by some officials who

pointed out that Mvula was on the verge of working itself out of the job whilst there were

immense opportunities for its continued existence as an NGO in the new dispensation.

6.6 Recommendations

From the foregoing conclusions, the following recommendations are with a view to ensuring

that Mvula is able to support the water services delivery role of developmental Local

Government, with special reference to three Northern KwaZulu-Natal District

Municipalities:

6.6.1 Review strategy in line with the contemporary strategic planning process

The world to which organizations have to adapt appears to be so turbulent and

unpredictable that traditional approaches to strategic management are simply not

appropriate.

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There is absolutely little to be gained from narrow strategic planning processes with

predetermined fixed objectives, outcomes and analysis. Mvula should develop its

strategy in accordance with the contemporary strategic planning process discussed at

great length in Chapter Three of the study.

6.6.2 Develop vision statement and new mission statement

In Chapter Three the strategic vision or strategic intent was defined as a roadmap of a

company's future that provides specifics about technology and customer focus, the

geographic and product markets to be pursued, the capabilities it plans to develop and

the kind of company that management is trying to create. Likewise Mvula should

develop its own strategic vision which will reflect management's aspirations for the

organization and its business, providing a panoramic view of where it should be going.

Such a vision statement should clearly point out an organization in a particular

direction and chart a strategic path for it to follow. On the other hand, the mission

statement, also defined in Chapter Three, identifies the enduring purpose of the

organization and answers questions such as Who are we? What is our business? Why

do we exist? Hence, it is grounded in the present, that is, it focuses on the current

markets and customers served by the organization. In simpler terms, the mission

statement tends to deal with a company's present business scope, namely, "who we

are, and what we do". The mission statement broadly describes an organization's

present capabilities, customer focus, activities and business makeup (Thompson and

Strickland, 2003).

The current mission statement of Mvula is "to improve the health and livelihoods of

poor and disadvantaged South Africans in rural and peri-urban communities through

facilitating delivery of integrated and sustainable water, sanitation and related

services". Such a mission statement suggests that it is Mvula's role to improve the

health and livelihoods of poor and disadvantaged South Africans living in rural and

peri-urban settings. This is not a correct statement or presupposition to make. This is

in fact a constitutional mandate that falls squarely within the domain of Local

Government.

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In view of Mvula's past close working relationship with DWAF, which was negatively

perceived by most municipalities, such a statement may appear challenging the

mandate of Local Government.

The mission statement also does not describe Mvula's customer focus which is,

according to the crafted strategy, Local Government. This should not be implied, but

rather expressed in explicit terms to avoid any assumptions or misconstructions. In the

light of this shortcoming, it is strongly recommended the Mvula should change the

current mission statement and realign it with the one proposed in The Mvula Trust:

Still a blue-chip NGO? (2003:22) document. The new mission should state that "The

Mvula Trust supports local government in the delivery of sustainable, reliable and

affordable water services and thus enables rural and peri-urban communities to

manage their own services using local resources and advocates sustainable models for

services delivery and management". This mission statement defines local government

as Mvula's point of focus in terms of provision of support. It further recognizes the

fact that communities have the capacity to effectively manage their own services.

Finally, it acknowledges Mvula's advocacy role with regards to best practices within

the water sector.

6.6.3 Broad consultation with existing and prospective clients

In order to achieve the objective analysis of its capabilities, challenges and operating

environment, the involvement of clients and collaborators during strategic planning

become imperative. It was appropriate and necessary for Mvula to invite DWAF, the

Department of Provincial and Local Government (DPLG), sampled municipalities and

community representatives to actively participate in its strategic planning process. The

result could have been the crafting of an objective and viable strategy which could

effectively respond to the support needs of municipalities in terms of water services

provision.

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Through broad consultation, Mvula can have a better understanding of local

government needs in terms of integrated planning and integrative thinking and thus

enabling municipalities weave sustainable water services into the broader fabric of

their constitutional mandate. On the contrary, the strategy formulation process within

Mvula was self-driven and thus highly subjective.

6.6.4 Define specific niche for the organization within the water services sector

While most municipalities recognize the significance of ISD skills in facilitating

community buy-in and project sustainability, they are determined to outsource these

so-called "soft skills" to Civil Society Organizations. In view of Mvula's historical

success in galvanizing and securing community participation in projects, its specialist

expertise in implementing Demand Responsive Approach (DRA), its vital role in rural

and peri-urban communities as well as its past ISD policy contributions, Mvula should

carve this as its specific niche area within the sector and should strive to remain the

leader in terms of developing modern methodologies that can facilitate institutional

and social development. Mvula need to take advantage of community capacity

building interventions such as dissemination of information and municipal and sector

policies; training of water committees as Water Services Providers (WSPs); project

management training; project operation and maintenance and other sector-related

skills. As an advocacy organization, Mvula should be enriching public debate at all

levels and help shape municipal thinking in terms of best practices. This can only be

realized by building and nurturing relationships of trust and respect with key

municipal officials.

6.6.5 Internal and external strategy evaluation

Mvula has not embarked on strategy evaluation so as to initiate needed strategic

review or corrective action that could have ensured the realignment of their existing

strategy with local government requirements. Such a process could have potentially

averted the downsizing and rightsizing processes that have already occurred within

Mvula and the Empangeni Regional Office in particular.

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6.6.6 Develop viable communications and marketing strategies

Although Mvula has been regarded as the largest NGO within its industry, it is vital

that it embarks on a vigorous marketing campaign after re-branding itself as an

organization geared towards supporting local government. Management should be

equipped with effective communications skills so as to articulate the organization's

strategy. For both staff and clients there must be an explicit communications strategy

for each major change management project, such as the change in the organization's

strategic direction. Given its vast experience with the sector, Mvula should strive to

brand and market itself as a learning organization that is capable of continual

regeneration from the variety of knowledge, experience and skills of individuals

within an organizational culture that encourages mutual questioning and challenge

around a shared purpose or vision.

6.6.7 Speed up pace of project implementation

Municipalities are desperate for support and assistance in meeting their developmental

responsibilities. The research findings showed that the majority of municipal officials

were dissatisfied with Mvula's performance in view of the length of time they took to

complete both water and sanitation projects. Secondly, most of the completed projects

left much to be desired in terms of quality and sustainability. The reality is that

municipalities are struggling to balance the constitutional requirement for

developmental local government with the legitimate demands of their constituencies

for immediate services. It is therefore up to Mvula to streamline and make their project

implementation approaches, management systems and development practices more

relevant to the needs of municipalities. Mvula must develop a gearing-up strategy that

will support municipalities in terms of rapid water services delivery.

6.7 Concluding summary

This Chapter has presented both the conclusions and recommendations emanating from

research findings emanating from questionnaire administered to officials of three District

Municipalities supported by Mvula's Empangeni Regional Office. Another source of such

recommendations was the in-depth literature review conducted in Chapter 3 of this study.

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Conclusions and recommendations made in this study pointed out that there is an urgent

need for Mvula to embark on an intensive strategic review process that will result in the

realignment of the organizational strategy with the constitutional mandate of Local

Government Mvula claims to support in water services delivery. The study has also given

insight into the need for broad consultation when an organization sets out to develop a

winning strategy that is intended to better position itself in the context of the changing

operating environment. The major drawback in Mvula's strategic planning process is that it

was an entirely self-driven and subjective process. Instead of becoming objective, rigorous

and ruthless in approach, Mvula became somehow complacent with its past performance as

an Implementing Agent as well as its significant contributions to the sector. This precluded

the crafting of a strategy that would be informed by its changing work context brought

about by the enactment of local government as well as its new role enshrined both in the

constitution and the water services legislative framework of South Africa.

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edition. South Africa: HSRC.

Noe et al (2002). Human Resource Management - Gaining A competitive Advantage. 3r

Edition. USA: McGraw-Hill Higher Education.

Porth S.J. (2003). Strategic Management - A Cross Functional Approach. New Jersey:

Prentice-Hall, Upper Saddle River.

The Mvula Trust (2003). The Mvula Trust Strategic Plan: 2003-2008.

Palmer Development Group (2003). The Mvula Trust: Still A Blue-chip NGO? Strategic

Review: gearing up for the next ten years.

Thompson A.A & Strickland A.J. (2001). Crafting and Executing Strategy - Text and

Readings. 12 Edition. New York: McGraw-Hill Irwin.

Thompson A.A & Strickland A.J. (2003). Crafting and Executing Strategy - Text and

Readings. 13th Edition. New York: McGraw-Hill Irwin.

Thompson J.L (2001). Understanding Corporate Strategy. United Kingdom: The Alden

Press.

Williamson et al (2004). Strategic Management and Business Analysis. Oxford: Elsevier

Butterworth Heinemann.

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APPENDIX 1

Mbongiseni Buthelezi P.O. Box 131

KwaMbonambi 3915

04 September 2006

TO WHOM IT MAY CONCERN

The Evaluation Of The Mvula Trust Strategic Plan; 2003 - 2008

The attached questionnaire forms part of a research project I am currently conducting in fulfillment of my Masters Degree in Business Administration (MBA), I am studying through the Graduate Business School of the University Of KwaZulu-Natal (UKZN, Westville Campus). This research will be undertaken in three District Municipalities, namely, Uthungulu, Umkhanyakude & Zululand, which are the major clients of the Empangeni Regional Office of The Mvula Trust.

My research topic is "The Evaluation Of The Mvula Trust Strategic Plan With Special Reference To Its Ability To Support The Water Services Delivery Role Of Developmental Local Government In Northern KwaZulu-Natal."

Your participation will be most appreciated, as it will enable the researcher to complete his milestone project in the pursuit of knowledge and acquisition thereof. It will further help the Mvula Trust either to consolidate or review its crafted strategy

Please be so kind to assist me by taking not more than twenty (20) minutes of your time to complete and return the attached questionnaire at your earliest convenience preferably no later than Monday, 18 September 2006.

Contact Person Email Contact Number Fax Number Physical Address

Mbongiseni Buthelezi [email protected] 035 550 7504 (w) or 082 576 3288 035 551 0344 (home telefax) Africa Centre For Health & Population Studies R168 to Hlabisa, Somkhele, Mtubatuba 3935

Your participation in the study is absolutely voluntary and you are free to withdraw from the study at any stage and from any reason. No direct benefit (s) will be derived from participating in the study.

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The information collected during the study will be kept confidential and you as a respondent will remain anonymous both during and after the research, thus your honest personal views and recommendations are requested.

I take this opportunity to express in advance my heartfelt gratitude for both your earnest effort as well as your most valuable time you have spent in completing this research questionnaire.

Yours faithfully

MBONGISENIW. BUTHELEZI

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APPENDIX 2

Research Topic: "The Evaluation Of The Mvula Trust Strategic Plan With Special Reference To Its Ability To Support The Water Services Delivery Role Of Developmental Local Government."

Introduction

This informed consent document purports to ask for your voluntary participation in this research study being undertaken in three District Municipalities, namely, Uthungulu, Umkhanyakude & Zululand, which are the major clients of the Empangeni Regional Office of The Mvula Trust. This document further gives you information about the study which will also be discussed with you. Once you understand the study, and if you agree to take part in it, you will be asked to sign the consent form in front of a witness. You will be given a copy of the signed form for your own record.

What Are The Objectives Of The Study?

The researcher has identified the following research objectives: • To evaluate the existing strategic plan of the Mvula Trust using the theoretical

paradigm. a To establish and evaluate the extent to which the strategic plan supports the water

services delivery role of Umkhanyakude, Uthungulu and Zululand District Municipalities.

• To determine the need for strategic realignment. a To gain research experience requisite in finding knowledge that is useful to a real world.

Who Are The Targeted Study Participants?

Municipal officials from relevant service delivery Units, namely Technical, Waters Services authority (WSA) and Institutional & Social Development (ISD) will be approached in order to seek ideas about important issues or aspects of the subject related to the above study objectives. It will also discover what is important across the research topic's range of knowledge.

What Will It Mean To Take Part In This Study?

Your participation will be most appreciated, as it will enable the researcher to complete his milestone project in the pursuit of knowledge and acquisition thereof. It will further help the Mvula Trust either to consolidate or review its crafted strategy.

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What Are The Risks Of Being In The Study?

There are not risks inherent in the study and an effort has been to keep the questions easy and straight forward. Some open-ended questions may require you to share your own perspective or views with the researcher. You are at liberty not to answer any of the questions.

What Are The Benefits Of Participating In This Study?

No direct benefit (s) will be derived from participating in the study. The information collected during the study will be kept confidential and you as a respondent will remain anonymous both during and after the research, thus your honest personal views and recommendations are requested.

What If You Do Not Want To Take Part?

Your participation in the study is absolutely voluntary and you are free to withdraw from the study at any stage and from any reason.

How Will Confidentiality Be Guaranteed?

Anonymity will only be guaranteed in respect of research participants. Participants will not be asked to furnish their names, except for departments they work for within target municipalities. Despite that all questionnaires will be coded during capturing. Anonymity will be precluded with respect to Mvula Trust and three municipalities to be involved in the study. Research findings, as part of the researcher's undertaking to Mvula, will be disseminated to the organization.

Who Can Be Contacted If You Want To Obtain More About The Study?

In the event you require more information before deciding on whether or not to participate or if you participate and later realize that there are questions that to be clarified, you may contact the researcher:

Contact Person Email Contact Number Fax Number Physical Address

Mbongiseni Buthelezi mbuthelezi(a),africacentre.ac.za 035 550 7504 (w) or 082 576 3288 035 551 0344 (home telefax) Africa Centre For Health & Population Studies R168 to Hlabisa, Somkhele, Mtubatuba 3935

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INFORMED CONSENT DECLARATION BY RESEARCH PARTICIPANT

I (Full names of participant)

hereby confirm that I understand the contents of this document and the nature of the research

project, and I consent to participating in this research project. I have been fully informed of the

study being conducted and understand what is required of me. I know the risks and benefits to

participating in the study.

I understand that my participation involve honestly answering questions from the questionnaire

by taking not more than twenty (20) minutes of my time to complete and return the attached

questionnaire to the researcher.

Under these conditions I am therefore willing to participate in the study and I understand that I

am at liberty to withdraw from the project at any time, should I so desire. Withdrawal from the

study will under no circumstances affect my relationship with the researcher.

Signature Of Participant Date

Signature Of Witness Date

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APPENDIX 3

TO BE COMPLETED BY DISTRICT MUNICIPALITY EMPLOYEES WITHIN THE WATER SERVICES AUTHORITY, TECHNICAL AND INSTITUTIONAL & SOCIAL DEVELOPMENT DEPARTMENTS:

SECTIONA

INSTRUCTIONS:

The purpose of this questionnaire is to assess your knowledge, understanding of the current Mvula Trust Strategy crafted for 2003 - 2008. It is also intended to evaluate the extent to which the crafted Strategy has been able to support the water services delivery role of your municipality as well as solicit your concrete recommendations to this end. Your honest response will be highly valued. Please answer all the questions; these are for both data collection and statistical purposes.

1) Do not write your name 2) Please provide a complete answer to each of the questions mentioned below 3) Fax the questionnaire to Mbongiseni Buthelezi at 035 551 0344 or send by email to [email protected]

Name Of Municipality

Department

Period of Service

DEMOGRAPHICS:

(Please tick ( * ) the appropriate box for the provided questions)

AGE:

GENDER:

Under 25 26-35 36-45 46-55 56-65 Over 65 MALE FEMALE

SECTION B

1. In what capacity do you know the Mvula Trust?

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2. What services does the Mvula Trust provide in general & to your District Municipality in particular?

3. Please state the Mvula Trust's mission and vision.

Mission:

Vision:

4. Have you seen and read the Mvula Trust Strategic Plan: 2003 - 2008 document?

5. Did you take part in the development of the above-mentioned Strategic Plan?

6. As an existing or potential client, were you ever consulted for input during and/or after the Mvula Trust's Strategy

development process? . If yes, what input or comment (s) did you make?

7. Is the Mvula Trust your preferred service provider within the water services sector? Why?

8. Does the Mvula Trust implement any water projects within your District Municipality?

9. Does the Mvula Trust implement any sanitation projects within your District Municipality?

10. If your answer to either question 8 or 9 or both is "Yes", has the number of projects allocated to the Mvula Trust

increased or decreased since 2003?

11. What factors do you think might have contributed to either the increase or decrease of projects allocated to the

Mvula Trust since 2003?

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12. Would you recommend that the current Mvula Trust Strategy be revised or strengthened?

13. What aspect(s) of their current Strategy do you think need to be revised or strengthened to ensure that the Mvula

Trust is at the cutting edge of service provision within the water sector?

14. In general, do you think the Mvula Trust has succeeded in supporting the water services delivery role of your

District Municipality? Why do you answer so?

15. What service delivery vehicle or strategic support does your District Municipality need to effectively deal with its

current water services backlog and thus meet its 2015 target?

16. Any other comment(s) you would like to make regarding this topic?

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APPENDIX 4

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Suite 43 Private Bag X20004 Empangeni 3880 Tel: (035)7722552 Fax: (035)7722531

T H E

'mmA. T R U S T

Office no 1 Nedbank Building 18 Maxwell Street

Empangeni South Africa

Supporting Water and Sanitation Development

17 November 2005

P.O. Box 131 KwaMBonambi 3915

Dear Mr Buthelezi

APPROVAL TO CONDUCT YOUR RESEARCH STUDY ON THE MVULA TRUST'S STRATEGIC PLAN

Your letter of request dated 15 November 2005 refers.

This serves to confirm that permission is hereby being granted for your research project that will focus on the evaluation of our organization's Strategic Plan. The topic of your research is "The Evaluation Of The Mvula Trust Strategic Plan With Special Reference To Its Ability To Support The Water Services Delivery Role Of Developmental Local Government." We understand that your study will be confined to three (3) District Municipalities (DMs) in northern KwaZulu-Natal, namely Umkhanyakude, Uthungulu & Zululand. These DMs are supported by our Empangeni Regional Office.

We further note that you have undertaken to make the dissertation report available to the Mvula Trust at completion.

I take this opportunity to wish you all the best with your academic studies.

Regards

OBONGWANA L MANAGER - EMPANGENI

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APPENDIX 5

10

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IVERSITY OF RESEARCH OFFICE (GOVAN MBEKI CENTRE) KWAZU LU - N ATAI WESTVILLE CAMPUS TELEPHONE NO.: 031 - 2603587 EMAIL : [email protected]

5 OCTOBER 2006

MR. MW BUTHELEZI (202523396) GRADUATE SCHOOL OF BUSINESS

Dear Mr. Buthelezi

ETHICAL CLEARANCE APPROVAL NUMBER: HSS/06556A

I wish to confirm that ethical clearance has been granted for the following project:

"An evaluation of the Mvula Trust strategic plan with special reference to its ability to support the water services delivery role of developmental local government in Northern KwaZulu -Natal"

Yours faithfully

MS. PHUMELELE XIMBA RESEARCH OFFICE

cc. Faculty Officer (Post-Graduate Studies) cc. Supervisor (Dr. N Potwana)

Fnnnriinn r n m n n w M » Frinpwnnd Howard Colleae Medical School Pleiermaritzbura Westvillp